In its latest earnings report, Microsoft has revealed that quite a few of its consumer-facing businesses have seen a loss of revenue. Key among these is its gaming division, which has seen its overall revenue go down by 7 percent year-on-year. Xbox hardware revenue has also taken a nosedive, being down by 33 percent.
While Xbox content and services revenue has gone down year-on-year by 5 percent, Microsoft has noted that the previous year was buoyed by strong first-party game releases. When it comes to Windows, Microsoft has reported revenue being down by 2 percent when compared to the previous year from its Windows OEM and Devices segment.
In its previous earnings report from back in January, Microsoft had revealed that its total gaming segment revenue shrank by 9 percent. The hardware segment was hit quite hard, with the company reporting a 32 percent decrease in sales. All in all, Microsoft had said at the time that Xbox had contributed to a 3 percent decline in overall revenue that was offset by other services.
The earnings report likely won’t include any initiative that Microsoft will have kicked off with its recent rebranding of the Microsoft Gaming division into Xbox, as well as the appointment of Asha Sharma as its CEO. Since taking over the leadership, Sharma, along with chief content officer Matt Booty, has continued to discuss how the Xbox platform will remain “open for more people to create.”
“I want to continue to make sure, as we build hardware, software, services, we’re spending just as much time on performance and play time as we are on making sure that we can innovate to offer more affordable devices and hardware and services,” said Sharma in a recent interview. “And so, look, there’s a reality to the market that we’re in, so there are no promises around what the price points are or anything like that. But I want to make sure that people around the world are able to play.”
Looking to the future, Sharma has also discussed the possibility of Microsoft’s next-generation console – Project Helix – being impacted by the ongoing global memory shortages.
“All of these things are an equation,” she said. “Memory costs will impact pricing, will impact availability. As we think about being where the world plays, we will take that into consideration. So we’re not ready to share a launch timeline right now. The world’s pretty dynamic. My number one focus, though, is to focus on what’s in our control, build a great console to play great games, including your PC games.”
To further bolster its gaming revenue, rumors from earlier this month have indicated that Microsoft is having internal discussions about the future of Xbox, which also involve a potential return of platform-exclusive games.
The recent announcement of Game Pass prices coming down might also help out the company’s revenues in time for its next earnings call. Along with this, since Call of Duty will stop coming to the service on day one of release, game sales might also play a major role by the end of the year.
