Microsoft has reported its ‘second best Q3 for Xbox revenue’

Update: Microsoft CEO Satya Nadella discussed the Xbox business during the company’s earnings call

Microsoft’s gaming business enjoyed a relatively strong third quarter in terms of revenue generated, according to figures released today.

On Tuesday the company announced its results for the third fiscal quarter ended on March 31, 2023.

Microsoft said revenue from Xbox content and services, which is by far the division’s biggest money generator, was up 3% year-over-year, driven by growth in Xbox Game Pass.

Update25th Apr 2023 / 10:58 pm

Microsoft CEO Satya Nadella provided some additional comments on the Xbox business during the company’s earnings call.

“We set third quarter records for monthly active users and monthly active devices,” he said.

“Across our content and services business, we’re delivering on our commitment to offer gamers more ways to experience the games they love, while revenue from subscriptions reached nearly $1 billion this quarter.

“This quarter we also brought PC Game Pass to 40 new countries, nearly doubling the number of markets where it’s available.

“Great content remains the flywheel behind our growth,” he continued. “We have now surpassed 500 million lifetime unique users across our first-party titles, and have never been more excited about our pipeline of games, including the fourth quarter launches of Minecraft Legends and Redfall.”

Contrastingly, Xbox hardware revenue was down 30% “on a prior year comparable that benefitted from increased console supply”, according to the company.

Overall, third quarter gaming revenue declined 4% year-over-year to around $3.59 billion.

However, as noted by independent analyst @DomsPlaying, that figure marks the second best third quarter ever for the Xbox business.

It only trails the $3.74 billion generated in the third quarter of the last fiscal year, when Microsoft’s gaming business posted record revenue for a non-holiday quarter.

Microsoft FY 2023 Q3:

Using the reported decline of 4%, quarterly gaming revenue was ~ $3.59B.

Annual Xbox sales are just above $15.4B right now.

Xbox Content & Services is upwards of $12B, or 78% of the total based on my math.

Here's annualized Xbox business sales over time. pic.twitter.com/Dnmeo8COVS
— Dom (@DomsPlaying) April 25, 2023

Unlike fellow platform holders Sony and Nintendo, Microsoft doesn’t announce console sales figures as part of its quarterly results.

However, Microsoft CEO Satya Nadella and chief financial officer Amy Hood may provide additional insight into the Xbox division’s performance during an earnings call at 2:30pm PT / 5.30pm ET / 10.30pm GMT.

The UK’s Competition and Markets Authority is due to announce on Wednesday whether it plans to approve or block Microsoft’s proposed acquisition of Call of Duty owner Activision Blizzard.