In a recent financial report published, Microsoft disclosed a 7% decrease in gaming income from their Xbox division during the most recent fiscal quarter, which concluded on December 31, 2024. Approximately 29% of this decline is believed to be due to a drop in Xbox hardware sales.
Speaking numerically, the Xbox division’s total earnings stood at approximately $6.6 billion, representing a decrease of around $530 million compared to the preceding year. However, it’s worth noting that the company saw a 2% increase in revenue from Xbox content and services – this could be attributed to video game sales, Game Pass subscriptions, and other related sources.
As a devoted fan, I’m thrilled to share that this quarter’s reported earnings primarily stemmed from Microsoft’s diverse service offerings. Approximately 21% each came from cloud-related services, server products, advertising, and search. However, it was Azure and its associated cloud services that truly shone, contributing a substantial 31% to our total revenue.
In their report, the company highlighted several potential threats that might impact future earnings. Among these risks are concerns about “eroding goodwill,” which could negatively affect income, as well as challenges related to supply chain, product quality, and the implementation of artificial intelligence within Microsoft’s product line.
The decrease in income from Xbox’s hardware sector aligns with an earlier report suggesting that overall console hardware sales have dropped compared to previous periods. According to the report, analyst Mat Piscatella at Circana observed a 38% drop in Xbox sales between December 2023 and December 2024. In contrast, PS5 sales decreased by only 18%.
Piscatella explained this by pointing out that the current-generation consoles had long surpassed their peak sales periods, which often occur earlier in a console’s lifecycle. Moreover, he highlighted that despite showing a decrease compared to the previous year, the hardware sales revenue in December 2024 was still greater than what it was in December 2019.
As a gamer, I’ve observed that, unlike the swift launch of the PlayStation, the Xbox Series X/S hasn’t been selling as quickly. In fact, it’s lagging about 13% behind the initial sales pace of the original Xbox One when it first hit the market.
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2025-01-30 16:41