By asahifile Xbox Console Revenue Falls 30% Year-Over-Year Amid Price Hikes
Microsoft’s Xbox division is grappling with significant revenue challenges, as evidenced by a recent earnings report for the quarter ending September 30. Xbox console hardware revenue saw a staggering 30% decrease compared to the same period last year. Notably, this decline occurred before the planned price hikes for the console, which increased from $20 to $70 on October 3, and the Game Pass Ultimate subscription, which rose from $20 to $30 in October.
While Xbox hardware revenue faltered, Microsoft reported steady revenue from Xbox content and services. The company noted growth in Xbox subscriptions and third-party content that has been “partially offset” by decreases in first-party gaming content, highlighting a shift in consumer engagement.
The Xbox division has also been a significant area of focus during Microsoft’s workforce reductions earlier this year, leading to the cancellation of several game projects. The reimagining of Perfect Dark, a beloved first-person shooter from 2000, has been indefinitely shelved along with Rare’s long-in-development project, Everwild.
Despite the challenges faced by its Xbox division, Microsoft reported robust growth overall, with a 17% increase in total revenue to $77.7 billion and a 22% rise in operating income. CEO Satya Nadella shared insights from the earnings call, emphasizing the company’s commitment to enhancing its AI capabilities, planning an 80% increase in AI capacity this year, and nearly doubling its data center infrastructure, including the powerful Fairwater facility in Wisconsin.
As Microsoft continues to navigate this turbulent landscape, many eyes will be on how it adapts its gaming strategy in the face of declining hardware sales and shifting consumer preferences.