Xbox Series SSource: Matt Brown | Windows Central

What you need to know

  • Microsoft has reported its FY22 Q1 earnings, seeing gaming revenue rise 16% year-over-year, with Xbox content and services and Xbox hardware up 2% and 166%, respectively.
  • The latest figures were attributed to a rise in Xbox Game Pass and first-party game revenue, while third-party titles offset year-over-year growth.
  • Xbox Series X and Xbox Series S also remain in high demand, outpacing Xbox One sales over the same period in FY21 Q1.

Microsoft announced its first-quarter earnings for its 2022 fiscal year on Tuesday, reporting a 22% increase in company-wide revenue at $45.3 billion. It also posted a 16% rise in gaming revenue, signaling continued year-over-year growth for its Xbox brand.

Xbox content and services saw a 2% year-over-year increase, attributed to growth in its Xbox Game Pass subscription service and in-house first-party titles. That uptick follows a strong previous fiscal year attributed to the COVID-19 pandemic, where Xbox services grew 30% amid a spike in demand for digital entertainment. Revenue from third-party titles declined over the period.

Microsoft also announced a 166% year-over-year jump in Xbox hardware revenue, driven by its latest generation consoles, Xbox Series X and Xbox Series S. That compares to a decline in Xbox One console sales throughout the first quarter of its 2021 fiscal year, prior to the November launch of its Xbox consoles.

These latest figures follow recent reports that Microsoft fell short of its Xbox Game Pass subscriber targets, achieving 37.45% growth versus its targeted 47.79% in its 2021 fiscal year. The numbers, published via a recent SEC filing, are among several performance goals for top executives at Microsoft. The latest official number on its Xbox Game Pass service confirmed 18 million subscribers as of January 2021.

Xbox Game Pass continues to represent a new revenue opportunity for Microsoft, funneling members into its console and PC services, serving up hundreds of games for a flat monthly fee. The Xbox Game Pass Ultimate service also offers perks like cloud gaming, streaming full-fledged Xbox titles to iOS and Android mobile devices. However, with blockbusters like Halo Infinite and Forza Horizon 5 still to come, future opportunities remain ahead for its services.