Xbox FY23 Q4 gaming revenue increased 1% year-over-year

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(Image credit: Microsoft)

What you need to know

  • Microsoft shared its financial results for the fourth quarter of fiscal year 2023. 
  • Gaming revenue is up 1% year-over-year, or an increase of $36 million. 
  • Xbox content and services revenue is up 5%, while Xbox hardware revenue decreased by 13%.

Xbox revenue is staying steady this quarter.

Microsoft shared its financial results for the  FY23 Q4 period ending June 30, 2023, revealing that gaming revenue is up 1% year-over-year, or $36 million. Xbox content and services revenue was up 5%, driven by growth in third-party content and Xbox Game Pass. This offset a decline in Xbox hardware revenue, which was down 13%.

This is an improved result compared to the prior quarter. In the FY23 Q3 period, Xbox gaming revenue was down 4% year-over-year, while Xbox hardware revenue was down 30%. 

During the conference call accompanying the earnings release, Microsoft CEO Satya Nadella noted that the company was looking forward to the launch of Bethesda Game Studios' Starfield in September, adding that Xbox Game Pass usage in hours played was up 22% year-over-year.

Microsoft reported $56.2 billion in revenue for the quarter overall, up 8% for its best fiscal quarter ever.

Windows Central's take

Results being improved compared to the prior quarter aren't surprising at all, considering June saw the launch of major games like Diablo 4 and Street Fighter 6. 

Looking ahead, Microsoft is definitely internally counting on the impending closure of the Activision Blizzard acquisition in the coming weeks to massively ramp up Xbox earnings. Naturally, Microsoft will not include anything from that acquisition in public expectations, since it simply isn't done yet.

The formula is there for success, but Microsoft has to deliver big games and increase the supply of available Xbox Series X consoles. During the Xbox Games Showcase 2023 back in June, Microsoft Gaming CEO Phil Spencer noted that console supply was increasing.

Samuel Tolbert
Freelance Writer

Samuel Tolbert is a freelance writer covering gaming news, previews, reviews, interviews and different aspects of the gaming industry, specifically focusing on Xbox and PC gaming on Windows Central. You can find him on Twitter @SamuelTolbert.

  • GraniteStateColin
    I'm not following the gaming side of the industry as closely as some times in the past. How did the rest of the industry do? Did MS outperform or underperform the industry? Thinking of companies like Sony, Ubisoft, Tencent, Valve, and even game adjacent hardware companies like Razer.

    While we need MS to turn profits and show growth so we know that business line is healthy and they won't abandon gaming, it's also important to understand how they're doing relative to the competition. 1% gain sounds small, but if everyone else shrank due to reduced time at home following the end of pandemic lockdowns, maybe that's great. On the other hand, if everyone else grew at 5% or more, than the paltry 1% growth may be even worse than it sounds.

    Meanwhile, I just want my Family Game Pass plan. I know MS ended the "experimental" Family Game Pass in other markets, but sounds like it's to put everything together for a new launch that will include the U.S. I hope so. Their revenue at least from me will increase once that comes online and by a lot more than 1% per year.
    Reply
  • Samuel Tolbert
    GraniteStateColin said:
    I'm not following the gaming side of the industry as closely as some times in the past. How did the rest of the industry do? Did MS outperform or underperform the industry? Thinking of companies like Sony, Ubisoft, Tencent, Valve, and even game adjacent hardware companies like Razer.

    While we need MS to turn profits and show growth so we know that business line is healthy and they won't abandon gaming, it's also important to understand how they're doing relative to the competition. 1% gain sounds small, but if everyone else shrank due to reduced time at home following the end of pandemic lockdowns, maybe that's great. On the other hand, if everyone else grew at 5% or more, than the paltry 1% growth may be even worse than it sounds.

    Meanwhile, I just want my Family Game Pass plan. I know MS ended the "experimental" Family Game Pass in other markets, but sounds like it's to put everything together for a new launch that will include the U.S. I hope so. Their revenue at least from me will increase once that comes online and by a lot more than 1% per year.
    I'll be sure to include other publishers recent financial results in the "read more" section moving forward.

    But for MS, basically it's not great but it's not terrible. Considering the games they've had in the past six months, still seeing any growth in content and services/Game Pass is very good. Hardware is the issue that needs to be solved.

    And agreed, I don't personally need it but a lot of people want that Family Plan. It feels a bit weird to me they're ending the preview program without having the full launch ready, but who knows.
    Reply