Xbox gaming revenue fell by 13% during the holiday quarter

Gaming revenue generated by Microsoft’s Xbox division during the three months ended in December 2022 declined by 13% year-over-year.

The company said on Tuesday that Xbox content and services revenue for the quarter was down 12%, while Xbox hardware revenue fell 13% compared to the same period a year earlier.

Microsoft said content and services revenue was down “on a strong prior year comparable, with declines in first-party content and lower monetization in third-party content, partially offset by growth in Xbox Game Pass subscriptions”.

During the same quarter a year earlier, Microsoft released Forza Horizon 5 and Halo Infinite, both of which enjoyed record launches for Xbox.

The declines were in line with the company’s previous guidance. In October, Microsoft’s chief financial officer Amy Hood said it was expecting gaming revenue to decline in the low-to-mid teens.

Last week, Microsoft announced plans to lay off approximately 10,000 employees by the end of March. The staff cuts will hit around 4.5% of the US technology giant’s 220,000-person workforce, including some members of its gaming division.

Halo developer 343 Industries was said to have been hit particularly hard by the layoffs, which also reportedly affected some employees at Gears of War studio The Coalition and Bethesda Game Studios.

Microsoft’s head of gaming, Phil Spencer, reportedly called the layoffs “painful choices” in an email sent to employees following the announcement.

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Phil Spencer tells Xbox employees layoffs were ‘painful’

As part of Microsoft-wide cuts, staff at Bethesda, 343 and marketing lost their jobs this week

343 Industries also reassured fans it will continue to develop future Halo content.

“Halo and Master Chief are here to stay,” it wrote in a statement published on its social media accounts. “343 Industries will continue to develop Halo now and in the future, including epic stories, multiplayer, and more of what makes Halo great.”

On Wednesday, Microsoft is expected to announce release dates for several highly anticipated Xbox games, including Redfall and Forza Motorsport, during a product showcase.