On the Xbox side, hardware sales plummeted 11 percent, while content and services income declined 6 percent. Microsoft ascribed the decrease in services to “reduced engagement hours and monetization” in both first- and third-party games. Microsoft’s overall gaming revenue fell by 7% year on year.
Despite the quarterly hardware sales dip, Nadella claims that Microsoft has “been the market leader in North America among next-generation consoles for three quarters in a row.” Xbox also had its highest fiscal year ever in terms of sales, with roughly $16.2 billion in total revenue. However, according to Microsoft’s fiscal Q1 2023 estimate, gaming revenue and Xbox content and services revenue would both decline again next quarter.
Microsoft disclosed last quarter that 10 million individuals have used the company’s Xbox Cloud Gaming service, and that figure is sure to have risen now that Fortnite is the sole game available for free on the service. “To date, over 4 million individuals have streamed [Fortnite], including over 1 million who were new to our ecosystem,” Nadella said.
