Xbox at Gamescom 2022

Xbox FY23 Q2 gaming revenue down 13% year-over-year

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What you need to know

  • On Tuesday, Microsoft announced its earnings for the FY23 Q2 period ending Dec. 31, 2022, including for Xbox.
  • The Gaming division at Microsoft saw a 13% decline in revenue versus the same period a year ago, or FY22 Q2.
  • This includes a 12% decline in Xbox content and services and a 13% decline in Xbox hardware sales.
  • This is within Microsoft’s expectations following the previous year of strong demand, and is partially offset by continued Xbox Game Pass growth.

Update, Jan. 24, 2023, at 5:30 p.m. CT: Microsoft has shared further clarification and guidance following the release of its FY23 Q2 earnings report, including revealing that Xbox Game Pass hit all new subscriber highs during the three-month period. Monthly active devices and streaming hours both also saw new records reached during the period, despite lower year-over-year sales and revenue. The Xbox platform as a whole enjoyed over 120 million monthly active users.

Microsoft also released its guidance for the current FY23 Q3 period. Overall, Microsoft expects gaming revenue to decline in the high single digits year-over-year, while Xbox content and services should decline in the low single digits. Other More Personal Computing categories like Surface and Windows OEM revenue will be hit much harder, while Xbox’s performance should be bolstered by Xbox Game Pass growth and anticipation surrounding upcoming first-and-third-party launches.

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