Microsoft's Xbox console revenue has taken a significant hit, falling by 30% year-over-year during the summer quarter. The decline in hardware sales doesn't appear to be directly related to the recent price hikes, which went into effect on October 3 and saw the cost of new consoles range from $20 to $70.
In contrast, revenue from Xbox content and services remained relatively stable compared to the same period last year. Microsoft credited growth in subscription numbers and third-party content for the increase, but noted that this was partially offset by a decline in first-party gaming content.
The decline in hardware sales is likely due to a combination of factors, including the impact of global workforce cuts earlier this year. As part of these cuts, several high-profile games were cancelled, including a modern remake of the classic shooter Perfect Dark and the long-in-development game Everwild from studio Rare.
Despite the challenges facing its Xbox division, Microsoft's overall revenue for the quarter ended September 30 saw a significant increase, rising by 17% to $77.7 billion. The company also reported a 22% increase in operating income.
In a recent earnings call, CEO Satya Nadella highlighted Microsoft's focus on expanding its AI capabilities, with plans to increase capacity by 80% this year and nearly double its data center footprint over the next two years. This growth will be supported by investments in Fairwater, Wisconsin, which has become the world's most powerful AI datacenter, capable of scaling to two gigawatts alone.
In contrast, revenue from Xbox content and services remained relatively stable compared to the same period last year. Microsoft credited growth in subscription numbers and third-party content for the increase, but noted that this was partially offset by a decline in first-party gaming content.
The decline in hardware sales is likely due to a combination of factors, including the impact of global workforce cuts earlier this year. As part of these cuts, several high-profile games were cancelled, including a modern remake of the classic shooter Perfect Dark and the long-in-development game Everwild from studio Rare.
Despite the challenges facing its Xbox division, Microsoft's overall revenue for the quarter ended September 30 saw a significant increase, rising by 17% to $77.7 billion. The company also reported a 22% increase in operating income.
In a recent earnings call, CEO Satya Nadella highlighted Microsoft's focus on expanding its AI capabilities, with plans to increase capacity by 80% this year and nearly double its data center footprint over the next two years. This growth will be supported by investments in Fairwater, Wisconsin, which has become the world's most powerful AI datacenter, capable of scaling to two gigawatts alone.
Xbox sales are tanking 
... another sign that gaming console companies need to rethink their strategies 
. It's weird they're not taking a hit from those price hikes tho 
. Maybe gamers just aren't feeling it? 
On the bright side, Microsoft is still doing alright I guess 
... 17% revenue increase for Q3 is no joke 
. Building the world's most powerful datacenter in Fairwater, WI is straight fire 
.
I mean, I'm not surprised the price hikes didn't affect sales much, but still... it's like they just gave away free money 
. 80% capacity increase this year? That's some next-level tech 
. And Fairwater, Wisconsin being the most powerful AI datacenter? Yeah, that's something to watch 
. Can't wait to see what they do with it 
.
they had such high hopes with perfect dark and everwild but it seems like things didn't go as planned 
but on the bright side msft is killing it financially 
meanwhile sata's focus on ai is super interesting 
. I get it, cost cuts and all that, but that's like cutting off your right arm in the process 
. They should've found ways to make it work, you know? 
Can't have your cake and eat it too, right? 
And now they're pushing up the prices like that? It's gonna be hard for them to turn it around. But on the bright side, at least they're investing in AI and all that jazz 
Xbox is struggling 
for Microsoft's overall revenue increase though! $77.7 billion is HUGE 
It makes sense that their content and services are doing well, especially with those awesome subscription numbers 
I'm low-key super hyped for Satya Nadella's plans to expand it! 80% increase in capacity this year alone is, like, whoa 
. But what do you guys think about the Perfect Dark game cancellation? Are you sad to see that one go? 
, but this is crazy. Canceling Perfect Dark and Everwild just makes sense now 
]
]
also, perfect dark getting cancelled 
and btw, 80% increase in ai capacity is crazy 
.