Xbox game revenue drops, but Game Pass subscriber base continues to grow

Xbox game revenue is mostly down on all fronts, but the Game Pass subscriber base is still growing.

Microsoft released second quarter financial results for fiscal year 2023 yesterday, and revealed that overall Xbox game revenue was down 13%. Xbox content and services, such as first-party software and monetization of third-party games, fell 12 percent, but Microsoft notes that the drop is in contrast to the “stronger comparable to the previous year”. Given that Xbox’s 2022 pales in comparison to the previous year, this is not surprising.

However, the financial results state that this 12% drop was “partially offset by growth in Xbox Game Pass subscriptions.” Xbox hardware revenue also fell 13%. During an earnings call, Microsoft CEO Satya Nadella revealed that Xbox’s monthly active users surpassed 120 million this quarter, as reported by Microsoft. IGN. Nadella added that Microsoft expects another year-over-year decline next quarter due to a situation similar to this quarter.

Video game sales analyst Benji-Sales (on Twitter) offered some commentary on these financial results, saying he’s less worried about Xbox’s game revenue and software performance but that the hardware decline is alarming.

“I’m less worried about Software performance and overall Game Revenue. They’re down, but that’s to be expected given how weak Xbox has been in a year for first-party content. More alarming here is Hardware. We should really be at the beginning of this generation’ not seeing a decline.”

However, as Benji-Sales and many others have noted, the past few quarters have been rather lackluster for Xbox, but 2023 is shaping up to be the Xbox Series X/S’s most successful year yet, with games like failure, star schooland Forza Motorsport scheduled for release.

We should learn more about some of these games in Today’s Xbox Developer Direct and then Starfield in the Starfield-specific rollout that Xbox is planning.

Do these financial results surprise you? Let us know in the comments below!


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