Xbox FY21 Q4 revenue climbs 11% while some pandemic growth subsides

Xbox Series X
Xbox Series X (Image credit: Matt Brown | Windows Central)

Update, July 27 (6:20 pm ET): Microsoft CEO Satya Nadella confirmed that the Xbox Series X and Xbox Series S are the fastest-selling Xbox consoles ever.

What you need to know

  • Microsoft has announced its FY21 Q4 earnings, detailing an 11% increase in gaming revenue, with Xbox hardware revenue up 172% year-over-year (YoY) this quarter.
  • Xbox content and services revenue slumped 4% compared to record numbers in 2020, amid the onset of the COVID-19 pandemic.

Microsoft exceeded expectations with its FY21 Q4 earnings on Tuesday, closing the financial year with $46.2 billion in company-wide revenue. The Xbox platform holder also saw an 11% increase in gaming revenue year-over-year (YoY) this past quarter, while software and services revenue slumped 4%, compared to record numbers in 2020.

The latest figures come as many key Xbox markets look to reopen following the COVID-19 pandemic. The overall revenue increase demonstrated continued growth for the Xbox business, although content and services failed to maintain momentum seen in its FY20 Q4 earnings.

Microsoft attributes the $128 million decrease in content and services revenue to a "decline in third-party titles" once seeing through stay-at-home orders. However, in-house first-party offerings and its Xbox Game Pass subscription services saw elevated the category, offsetting the impact of third-party titles. The company reported "record numbers" for Xbox engagement last year, even scaling back some operations to account for unforeseen demand.

Microsoft has also seen continued three-figure growth for Xbox hardware revenue this quarter, increasing 172%, bolstered by the launch of Xbox Series X and Xbox Series S in November. The latest console generation continues to face supply constraints, with ongoing chip shortages failing to meet global demand. Console hardware shortages are expected to continue into the next financial year.

However, according to CEO Satya Nadella said that the two consoles were the fastest selling Xbox consoles ever, "with more consoles sold life-to-date than any previous generation."

Matt Brown

Matt Brown was formerly a Windows Central's Senior Editor, Xbox & PC, at Future. Following over seven years of professional consumer technology and gaming coverage, he’s focused on the world of Microsoft's gaming efforts. You can follow him on Twitter @mattjbrown.