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[Clear]

Revenue figures are meaningless without some idea of the profit/loss margins based on current and ongoing expenditure.

"Best ever" shouldn't be surprising when the amount money spent purely on acquisitions over the past few years rivals their oppositions entire market caps! And of course, the acquisition cost is just the beginning of the spend, these new businesses need to fund themselves over the long term.

And let's be honest, for all that money spent so far there's been precious little new added to gaming as a whole. If only MS.Xbox was as good at *creating* brands as acquiring proven successes...

 

[Nubulax]

The fun fact is that even after a 70$ billion dollar acquisition for Xbox, the Shareholders just asked about Cloud and AI haha.

Ya the two areas they SHOULD be heavily investing in more and more instead of going on a bender and spending 80 Billion on the xbox division

 

[Pelta88]

Revenue figures are meaningless without some idea of the profit/loss margins based on current and ongoing expenditure.

You gotta let them keep spinning the PR for all it's worth.

 

[DaGwaphics]

We know how Microsoft felt going into this console generation and they believed they had a winning strategy.

You don't automatically ignore this because their strategy failed. Do you think the Xbox Series S wasn't designed to sell more consoles? Do you think having the power narrative wasn't important for Microsoft? Why do you think Phil was anxious about the PS5 spec reveal?

Because he was worried about Sony. They want to win. Period and you have to treat it as important.



Sony has been pushing cloud gaming, rumored PS trophies on PC, and they talked about releasing their GaaS games on day one on PC. They pushed cloud gaming before MS, so what are you talking about that they're not pushing any other avenues?

You guys are pushing the same argument.

"Microsoft is pushing outside of consoles so it's not as important."

Growth is important on PC, Cloud, and Console. You don't spend billions of dollars manufacturing a console to not treat it as important as the others.

They invested billions in cloud gaming
They invested billions in the console market
They invested billions in the PC gaming market
They invested billions in the mobile gaming market.

Their strategy is to defeat the competition and they want to see growth in console despite what you're saying.

I said this many times before;

MS and Sony are clearly working different strategies which would change the expectations for console sales.

Sony wants those PC gamers to buy a console even if they only play 4 or 5 games on it over the course of the generation, MS can not expect to get those sales since they launch on PC day one. Even if brand recognition was the same between the two companies, this difference alone would change console sales outcomes.

 

[onQ123]

C

Call of Duty release should actually do more than that alone lol

 

[Unknown?]

Prediction: Next year will be a double digit decline.

 

[Die Namek Ability]

"taking a long time for Nintendo Xbox to see that their future exists off of their own hardware." - Some Asshole

Even though this comment is extremely baiting, its so damn true. Why the hell does MS just not go 3rd party. There business model from thier own admission is to reach as many subscribers as possible with their games service so why handicap themselves by keeping it off the biggest platforms in gaming history (Sony and Nintendo)?

Im being to think its more about pride and ego with Mr Phil then it is about making money.

 

[UltimaKilo]

It will be interesting to see if they’re able to make up for this huge acquisition, particularly since they primarily did it to tap into the mobile market. However, I don’t think Hearthstone is going to be that lucrative.

 

[DForce]

MS and Sony are clearly working different strategies which would change the expectations for console sales.

Sony wants those PC gamers to buy a console even if they only play 4 or 5 games on it over the course of the generation, MS can not expect to get those sales since they launch on PC day one. Even if brand recognition was the same between the two companies, this difference alone would change console sales outcomes.

No.

Sony knows the vast majority of PC gamers won't move to PlayStation and that's why they're looking to expand to PC. It's an avenue to generate more sales and that's why they're doing it. If their main goal is for them to buy PlayStation consoles, then Sony wouldn't bother creating PS Now, which did not require a PlayStation console, but only a Streaming device.

Microsoft tried to be a serious competitor in console sales this generation. You can deny it all you want, but they were pushing hard for console sales. They believed they could under-cut the PlayStation 5 price point and also have the more powerful console.

Their strategy didn't work.

Xbox game sales poorly? It's on Game Pass
Xbox console sales perform poorly? Microsoft doesn't care about console sales.

There's always an excuse whenever MS underperforms.

 

[LordBlodgett]

Prediction: Next year will be a double digit decline.

I'm sure that adding Activision is going to tank their YOY revenue......

 

[Unknown Soldier]

Ya the two areas they SHOULD be heavily investing in more and more instead of going on a bender and spending 80 Billion on the xbox division

They bought 60% of OpenAI for pennies on the dollar compared to future value, they already got what they need for AI

 

[Unknown?]

I'm sure that adding Activision is going to tank their YOY revenue......

Was talking hardware. PS5 is going to be in its prime and Switch 2 will steal all the press and attention.

 

[Three]

I'm sure that adding Activision is going to tank their YOY revenue......

I'm pretty sure he's talking about a double digit decline in xbox hardware revenue not Activision.

 

[Aion002]

Even though this comment is extremely baiting, its so damn true. Why the hell does MS just not go 3rd party. There business model from thier own admission is to reach as many subscribers as possible with their games service so why handicap themselves by keeping it off the biggest platforms in gaming history (Sony and Nintendo)?

Im being to think its more about pride and ego with Mr Phil then it is about making money.

Because Sony and Nintendo probably doesn't want gamepass on their consoles. They rather get their cut per game sale, than have a third party subscription service decreasing games sales.

That's probably the reason that Ubisoft+ isn't available on Playstation and while the EA subscription is available, EA doesn't add day one releases on it... So it's different.

If I remember correctly, Sony gets a 30% cut from each game sold on psn.

 

[StreetsofBeige]

The Starfield and Game Pass effect.

Funny how out of the 3 bullet points, the one with the biggest increase was omitted by the OP.

 

[graywolf323]

Even though this comment is extremely baiting, its so damn true. Why the hell does MS just not go 3rd party. There business model from thier own admission is to reach as many subscribers as possible with their games service so why handicap themselves by keeping it off the biggest platforms in gaming history (Sony and Nintendo)?

Im being to think its more about pride and ego with Mr Phil then it is about making money.

the thing is they don’t want to be one of the subscription services, they want to be THE subscription service & that can’t really be the case if it’s just their games on other consoles

as badly as they’ve fucked up Xbox‘s hardware market, I doubt they’ll try to exit it because they know Playstation & Nintendo won’t allow Game Pass on their consoles if it’s anything more than XGS’ games only (like EA Access, etc.) which isn’t good enough for Microsoft

after all the company operates off of embrace, extend, extinguish; they want to dominate the video game market just like they do with their other services (Office, Windows, etc.)

 

[adamsapple]

Funny how out of the 3 bullet points, the one with the biggest increase was omitted by the OP.

Yep, not sus at all.

OP should request a mod to update the topic title, I'll do that too.

Should be something like " Microsoft Q1: Gaming revenue up 9%, Content & Services up 13% and Xbox hardware down 7% "

 

[Die Namek Ability]

Because Sony and Nintendo probably doesn't want gamepass on their consoles. They rather get their cut per game sale, than have a third party subscription service decreasing games sales.

That's probably the reason that Ubisoft+ isn't available on Playstation and while the EA subscription is available, EA doesn't add day one releases on it... So it's different.

If I remember correctly, Sony gets a 30% cut from each game sold on psn.

Yeah that makes alot of sense

 

[ChorizoPicozo]

People sure are drinking the green Kool-Aid, aren't they?

Okay, I understand, they've been through quite a difficult period. I mean...the very existence of this brand has been on the line a couple of times....it has been rough.

But please, you should be mindful and not dismiss and underestimate the mega challenge Xbox is going to have in the next several years.

meaning: Stop blaming others for failures and disappointments; everything is (as always has been) on MS/Xbox's hands.

 

[Iced Arcade]

This is just going to add to next year the gaming revenue being bonkers with that COD, candy crush money in it.

 

[DryvBy]

Revenue figures are meaningless without some idea of the profit/loss margins based on current and ongoing expenditure.

"Best ever" shouldn't be surprising when the amount money spent purely on acquisitions over the past few years rivals their oppositions entire market caps! And of course, the acquisition cost is just the beginning of the spend, these new businesses need to fund themselves over the long term.

And let's be honest, for all that money spent so far there's been precious little new added to gaming as a whole. If only MS.Xbox was as good at *creating* brands as acquiring proven successes...

Thank you. Business 101: margin vs revenue. There's a huge difference between profits in the two. If your margin is up 9%, that's something impressive but revenue? Lol. Revenue in failing business are even up because this pesky thing called inflation.

They're not cutting their bonuses because they are up. They're not doing a hail mary because they're up. You don't have negative numbers in hardware and think everything is great.

 

[DaGwaphics]

No.

Sony knows the vast majority of PC gamers won't move to PlayStation and that's why they're looking to expand to PC. It's an avenue to generate more sales and that's why they're doing it. If their main goal is for them to buy PlayStation consoles, then Sony wouldn't bother creating PS Now, which did not require a PlayStation console, but only a Streaming device.

Microsoft tried to be a serious competitor in console sales this generation. You can deny it all you want, but they were pushing hard for console sales. They believed they could under-cut the PlayStation 5 price point and also have the more powerful console.

Their strategy didn't work.

Xbox game sales poorly? It's on Game Pass
Xbox console sales perform poorly? Microsoft doesn't care about console sales.

There's always an excuse whenever MS underperforms.

Not buying it. If they wanted to support PC natively the games would be there day one (all of them, not just the GaaS shovelware they want to dump out there), but they aren't because they know that would lower console demand.

 

[Killjoy-NL]

Re: Series X hardware shipment estimates

Lifetime shipments below 26M?

Am I missing something, because that would be an absolute joke.

 

[X-Wing]

I still don't think this is quite right. While I'm sure there are some people who just decide to go PC and play xbox exclusives. But if people are gonna buy a gaming pc instead of xbox they would probably do the same for PS. And with Sony moving in that direction it tells me that neither MS or Sony are really worried about this.

I think it's more xbox is just lagging behind consoles sales to Sony and the money they are making from PC is money that they would have missed out on otherwise.

At the end of the day I think MS is fine without selling consoles as they are expensive to make and not very profitable. They more see consoles as a necessary evil to be seen as a player in the game market. They are the backbone of your customer base and a floor for revenue.

There are a few differences between the two:
- PlayStation hardware is popular and being sold with profit
- PlayStation titles do not seem to sell incredibly well on PC
- Microsoft has their own store on PC, in the long run they can start offering games exclusively there and cut Steam out to improve margins
- Microsoft can use Windows to pull people to their store and to advertise their games
- Microsoft has focused on acquiring IPs that are extremely popular among the PC crowd.

 

[DForce]

Not buying it. If they wanted to support PC natively the games would be there day one (all of them, not just the GaaS shovelware they want to dump out there), but they aren't because they know that would lower console demand.

They're literally supporting PC by releasing games on the platform. You don't need to release it day one to do this. You're making no sense.

Now you're trying to ignore the GaaS titles because it goes against what you're saying.

They'll risk losing some console sales for some games in order to create a bigger audience for the GaaS games. If their objective was to bring players to their platform, then they wouldn't release those games day one on PC.

 

[iamvin22]

So they still made money with declining hardware?

Have you heard of the term "profit"?

 

[DaGwaphics]

They're literally supporting PC by releasing games on the platform. You don't need to release it day one to do this. You're making no sense.

Now you're trying to ignore the GaaS titles because it goes against what you're saying.

They'll risk losing some console sales for some games in order to create a bigger audience for the GaaS games. If their objective was to bring players to their platform, then they wouldn't release those games day one on PC.

More simply, if they wanted to support PC and were not concerned about lowering console demand the games would be there day 1 to maximize return. Period. There is no rational talking points surrounding that. The only valid reason to withhold the PC release is to encourage console sales, they literally have said as much themselves. You even undermined your own argument by saying they would "risk losing some console sales" to create a bigger audience for the GaaS games, which is the very point being discussed.

MS made the choice to release everything day one which will always lower console demand for them, it's a gamble they took because it helped cover development costs for first party games but the associated negatives were known to them. Consoles for MS are an option for players that don't have a gaming PC or just want the console experience for whatever reason, it isn't the linchpin of their strategy and hasn't been for quite a while. Consoles are probably the most profitable part of their ecosystem thanks to the store and the subscriptions, and will remain important but not to the same degree as PS is for Sony.

 

[adamsapple]

Call of Duty release should actually do more than that alone lol

This is just going to add to next year the gaming revenue being bonkers with that COD, candy crush money in it.

They already earned record breaking revenues this quarter. The CoD and especially King revenue is going to give this a pretty sizable boost.

 

[Killjoy-NL]

More simply, if they wanted to support PC and were not concerned about lowering console demand the games would be there day 1 to maximize return. Period. There is no rational talking points surrounding that. The only valid reason to withhold the PC release is to encourage console sales, they literally have said as much themselves. You even undermined your own argument by saying they would "risk losing some console sales" to create a bigger audience for the GaaS games, which is the very point being discussed.

MS made the choice to release everything day one which will always lower console demand for them, it's a gamble they took because it helped cover development costs for first party games but the associated negatives were known to them. Consoles for MS are an option for players that don't have a gaming PC or just want the console experience for whatever reason, it isn't the linchpin of their strategy and hasn't been for quite a while. Consoles are probably the most profitable part of their ecosystem thanks to the store and the subscriptions, and will remain important but not to the same degree as PS is for Sony.

The problem is, if the majority of GamePass subs are on Xbox, their Xbox installbase is very important to the success of GamePass.

Right now, it's hitting a ceiling with PC included.
It isn't going to really break through that ceiling if they don't sell more consoles and it won't get much better.

Now imagine MS quitting consoles, their userbase will likely split between PC and Playstation, with the majority going to Playstation (Xbox primarily exists of console-demographic).
GamePass subs will take a big hit.

Spencer already stated that they need the mobile market (most obvious reason being GamePass related), but that won't push GamePass subs anywhere near their targeted 100M subs by 2027. If ever.

MS needs Nintendo and Playstation for GamePass to stay relevant, because their consoles installbase is dying.

 

[ShaiKhulud1989]

So no GP numbers update despite the Starfield quarter and Nadella boasting about the short term GP growth because of it? It is also worth noting that prior to this GP growth was excluded as a metrics to calculate Nadella’s bonuses.

This is way more interesting than falling hardware sales tbh. The subscription model plateaued in every industry and at this point I am almost sure that MS will scale back their subs strategy to sell more games in a traditional manner.

 

[DenchDeckard]

PC stays winning, it is the best experience. Still love my consoles but when you do invest in a beast it makes it even more difficult to play on consoles. Glad I have my series x's for when a pc port is fucked though.

Guess game pass is growing nicely too thanks to the percentages uplift.

Xbox should be making some good profit now, thanks to the decline in hardware sales that eat into profit margins and thr uplift in content models.

 

[H-I-M]

Revenue figures are meaningless without some idea of the profit/loss margins based on current and ongoing expenditure.

Notice how Sony and Nintendo actually share both revenue and profits, in details, but not Microsoft.

I wonder why.

 

[DForce]

More simply, if they wanted to support PC and were not concerned about lowering console demand the games would be there day 1 to maximize return. Period. There is no rational talking points surrounding that. The only valid reason to withhold the PC release is to encourage console sales, they literally have said as much themselves. You even undermined your own argument by saying they would "risk losing some console sales" to create a bigger audience for the GaaS games, which is the very point being discussed.

You can keep repeating the same false statement but it's not going to make it true. They supported PC when they decided to release games on the platform and there's no rule that it has to be day one. Their commitment to releasing their games on the platform.

And no, it doesn't undermine my argument because there are two mere facts that you cannot ignore.

1. No reasonable person within Sony thinks a lot of gamers would buy a PlayStation console.
2. Releasing gamers on PC also discourages gamers from buying a PlayStation because they'll wait for the PC release.

They know the vast majority of their argument on PC would prefer to wait and that's who they're selling to.

MS made the choice to release everything day one which will always lower console demand for them, it's a gamble they took because it helped cover development costs for first party games but the associated negatives were known to them. Consoles for MS are an option for players that don't have a gaming PC or just want the console experience for whatever reason, it isn't the linchpin of their strategy and hasn't been for quite a while. Consoles are probably the most profitable part of their ecosystem thanks to the store and the subscriptions, and will remain important but not to the same degree as PS is for Sony.

Microsoft is third in the console race and saw no growth and that's why they needed to expand outside of console.

Do you realize that Xbox Series consoles are on a similar pace to Xbox One, right? This alone proves it doesn't dramatically change sales and Microsoft only expected a small minority of gamers to leave Xbox for PC.

Your arguments fall flat with basic logic. You think the risk of losing console sales means they not supporting it and that's simply a really bad argument to make.

They can save console sales and support PC by releasing games later on the PC platform.

You're really trying to say they're not trying to support PC even though they're rumored to make their own launcher. This is what you call support. No amount of spinning will prove differently.

 

[Banjo64]

Not particularly a disaster since you don't need a Series console to play new first party Xbox games. The software is where the money is, not the hardware. In this case selling fewer consoles on increased software revenue probably increases their margins considering they're probably losing money on hardware.

In that case, release the games natively on Switch and PS then.

 

[jm89]

Lifetime shipments below 26M?

Am I missing something, because that would be an absolute joke.

Possibly means that is the up to date total shipment.

 

[Killjoy-NL]

Possibly means that is the up to date total shipment.

Yeah, that's quite bad. Especially since it's shipped and not sold-through.

 

[jm89]

Satya knows it. Third party publisher is the way forward.

 

[Riky]

You can see why Phil Spencer has received the massive financial support he has when he has grown the Xbox business continually over the years, like I said he has constantly delivered.
I'm sure hardware will now show an uptick as the release schedule for the first party games ramps up, since the Gamepass subs are heavily weighted towards console though the hardware isn't going anywhere, it's essential.

 

[Killjoy-NL]

You can see why Phil Spencer has received the massive financial support he has when he has grown the Xbox business continually over the years, like I said he has constantly delivered.
I'm sure hardware will now show an uptick as the release schedule for the first party games ramps up, since the Gamepass subs are heavily weighted towards console though the hardware isn't going anywhere, it's essential.

Delivered on what? The hole he dug?

GamePass stagnates at ~40M incl PC and consoles shipped <26M.

Their 1st party output has been mediocre for years and even their last strong franchise (Forza) has been met with a lot of criticism lately.

 

[ChuckeRearmed]

Satya knows it. Third party publisher is the way forward.

No, it just means that as long as Sony and Nintendo continue to have exclusive games, Microsoft won't become a third party. And considering that neither want to stop exclusivity practices....Xbox is here to stay and acquire more.

 

[jm89]

No, it just means that as long as Sony and Nintendo continue to have exclusive games, Microsoft won't become a third party. And considering that neither want to stop exclusivity practices....Xbox is here to stay and acquire more.

Just a matter of when not if when they become a full third party publisher.

They can acquire more, and then release as a third party publisher on playstation

 

[Poltz]

Xbox consoles are absolutely cooked.

 

[Little Chicken]

Things are looking good for Xbox!

 

[Riky]

Delivered on what? The hole he dug?

GamePass stagnates at ~40M incl PC and consoles shipped <26M.

Their 1st party output has been mediocre for years and even their last strong franchise (Forza) has been met with a lot of criticism lately.

Delivering on growing the business.....like the figures show clearly
He won publisher of the year and has delivered a multitude of 80+ games for gamers. He has the biggest first party line up in history that is just kicking into gear with new IP not retreading the same stale ground over and over with remasters.
Next year already looks stellar with the likes of Hellblade 2 and Avowed, we even have massive studios like id and The Coalition without an announcement yet but we know they are working on huge AAA games.
He's done a great job and the future is bright.

 

[nikolino840]

More signs telling Microsoft to give up the hardware side of Xbox.

They are working already on the next hardware via ftc leaks (plus the new series x all digital)

 

[Killjoy-NL]

Delivering on growing the business.....like the figures show clearly
He won publisher of the year and has delivered a multitude of 80+ games for gamers. He has the biggest first party line up in history that is just kicking into gear with new IP not retreading the same stale ground over and over with remasters.
Next year already looks stellar with the likes of Hellblade 2 and Avowed, we even have massive studios like id and The Coalition without an announcement yet but we know they are working on huge AAA games.
He's done a great job and the future is bright.

Ok, Phil.

 

[Fabieter]

No, it just means that as long as Sony and Nintendo continue to have exclusive games, Microsoft won't become a third party. And considering that neither want to stop exclusivity practices....Xbox is here to stay and acquire more.

At one point "we need them to stay competitive wont cut it anymore tho", but we will release all games on all platforms will get loads of possibilities to buy even more publishers.

 

[ShadowkillXNA]

You can see why Phil Spencer has received the massive financial support he has when he has grown the Xbox business continually over the years, like I said he has constantly delivered.
I'm sure hardware will now show an uptick as the release schedule for the first party games ramps up, since the Gamepass subs are heavily weighted towards console though the hardware isn't going anywhere, it's essential.

 

[Banjo64]

Satya knows it. Third party publisher is the way forward.

It is up to him

 

[Jemm]

They are working already on the next hardware via ftc leaks (plus the new series x all digital)

"The next Xbox will be the last one before they go full 3rd party..."