Microsoft has released its financial results for Q3 of its 2023 Fiscal Year, which consists of roughly January through March of this year. In it, the company revealed that Xbox hardware revenue is down but its Xbox content and services revenue is slightly up thanks to Xbox Game Pass subscription growth. 

More specifically, Xbox hardware is down 30% and Xbox content and services is up 3%. Overall, Xbox’s gaming revenue is down 4%, though. Microsoft CEO Satya Nadella says that the company set third-quarter records for monthly active users and devices, and that Xbox’s gaming subscriptions (see: Game Pass) reached almost $1 billion this quarter. Despite this growth and revenue, though, Microsoft did not release new numbers regarding Game Pass subscription count – the latest count was 25 million in January 2022. 

As for the dip in hardware revenue, Microsoft says the decline comes from the comparison of this quarter this year to the same quarter in the previous fiscal year, which gained a boost thanks to increased console supply. 

Here are some other numbers from Microsoft’s financial results: 

  • Revenue was $52.9 billion, an increase of 7% (or 10% in constant currency)
  • Operating income was $22.4 billion, an increase of 10% (or 15% in constant currency)
  • Net income was $18.3 billion, an increase of 9% (or 14% in constant currency)
  • Xbox hardware revenue is down 30%
  • Xbox content and services revenue is up 3%
  • Overall, Xbox gaming revenue is down 4%

These results arrived yesterday, shortly before the Competition and Markets Authority, a U.K. regulatory agency that serves the same purpose as the Federal Trade Commission in the U.S., blocked Microsoft’s $68.7 billion acquisition of Activision Blizzard today. You can read more about that here

What do you think Xbox needs to do to increase Xbox hardware revenue? Let us know in the comments below!

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