What you need to know
- Microsoft shared its financial results for FY22 Q4, ending June 30, 2022.
- The company saw a 6% decrease year-over-year in Xbox revenue due to lower engagement and limited hardware supply.
- Xbox hardware revenue was down by 11%.
- This decrease was partially offset by an increase in Xbox Game Pass subscribers.
Update 7/26/22 6:20 PM ET: During its earnings call, Microsoft told investors it expects Xbox gaming to decline in the low to mid-single digits for the next quarter. The company attributed this estimate to "declines in first-party content" but noted that this would be offset by continued growth with Game Pass subscribers and console sales. Xbox Content and services revenue is also expected to decline in the low to mid single digits.
Microsoft shared its FY22 Q4 earnings on Tuesday, confirming a slight expected dip in Xbox content revenue.
Microsoft revealed a 6% decrease year-over-year in Xbox revenue, driven by lower console supply and lower engagement. Xbox hardware revenue saw a decrease of 11% in year-over-year revenue. Microsoft noted that this dip in Xbox revenue was partially offset by an increase in Xbox Game Pass subscribers.
The company had previously seen steady growth across Xbox year-over-year, per Microsoft's FY22 Q3 earnings. The current number of Xbox Game Pass subscribers is unknown, with Microsoft last sharing in January 2022 that the service had reached over 25 million active subscribers.
Notably, Microsoft had not shipped a first-party Xbox game in the calendar year 2022 until the launch of As Dusk Falls in July. Later in the year, Microsoft plans to launch Obsidian Entertainment's Grounded and Pentiment, in September and November 2022, respectively.
Outside of gaming, Microsoft's FY22 Q4 earnings saw $51.9 billion in revenue, an increase of 12%. The company saw a decline in Windows revenue but an increase in Surface earnings.
Looking ahead, Microsoft is working to significantly grow Xbox revenue and first-party content with the pending acquisition of Activision Blizzard. The deal is worth almost $69 billion and would see Activision Publishing, Blizzard Entertainment, and King added to the Xbox first-party roster, adding numerous studios and gaming IP such as Call of Duty and World of Warcraft. The deal is currently undergoing regulatory review and is slated to finalize at some point before June 30, 2023.
