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Microsoft's gaming business faced a setback in the September quarter. Recently, the gaming giant has announced its last quarter results and it revealed a 2% drop in Xbox content and services revenue from the previous year. However, the overall revenue stands at USD 92.3 billion, up 19% from a year earlier.
Reportedly, the drop was around 1% after adjusting for currency changes. Net income of the gaming giant rose 32% to USD 36.6 billion, while Microsoft Cloud revenue grew 30% to USD 63.9 billion. The results show that gaming faced challenges even when other parts of the company continued to grow.
That’s the entire story. While Xbox’s total revenue fell 2%, console hardware revenue dropped 14%. According to reports, lower revenue from third-party games and Xbox Game Pass led to the fall in content and services.
Regarding the overall result, Satya Nadella, chairman and chief executive officer of Microsoft, mentioned, “We are delivering greater capability, choice, control, and cost efficiency for customers across our entire stack.” He continued, “By helping organizations build and own their own intelligence, and earning trust through agent safety and security, we are translating our innovation into growing adoption and real-world impact across every industry.”
Also Read: Microsoft Gaming Executive Helen Chiang Steps Down as Xbox COO
The latest results show how hard it can be to keep gaming revenue steady. Xbox mainly depends on game sales and subscriptions to generate revenue. When both areas weaken, the impact spreads across its gaming business. Lower console sales add to the challenge.
Microsoft's overall business is growing, but Xbox still faces pressure. Its own games helped reduce the revenue drop in the September quarter. The next few months will show whether new releases can lift gaming revenue; especially, the launch of GTA on November 19 can turn all the tables and help the company rely less on weaker third-party sales and subscription income.