Xbox Console Sales Continue To Crater With Massive 42% Revenue Drop (arstechnica.com) 60
An anonymous reader quotes a report from Ars Technica: Microsoft's revenue from Xbox console sales was down a whopping 42 percent on a year-over-year basis for the quarter ending in June, the company announced in its latest earnings report. The massive drop continues a long, pronounced slide for sales of Microsoft's gaming hardware—the Xbox line has now shown year-over-year declines in hardware sales revenue in six of the last seven calendar quarters (and seven of the last nine). And Microsoft CFO Amy Hood told investors in a follow-up call (as reported by GamesIndustry.biz) to expect hardware sales to decline yet again in the coming fiscal quarter, which ends in September. The 42 percent drop for quarterly hardware revenue -- by far the largest such drop since the introduction of the Xbox Series X/S in 2020 -- follows an 11 percent year-over-year decline in the second calendar quarter of 2023.
Microsoft no longer shares raw console shipment numbers like its competitors, so we don't know how many Xbox consoles are selling on an absolute basis. But industry analyst Daniel Ahmad estimates that Microsoft sold less than 900,000 Xbox units for the quarter ending in March, compared to 4.5 million PS5 units shipped in the same period. Overall, the reported revenue numbers suggest that sales of the Xbox Series X/S line peaked sometime in 2022, during the console's second full year on store shelves. That's extremely rare for a market where sales for successful console hardware usually see a peak in the fourth or fifth year on the market before a slow decline in the run-up to a successor. [...] Aside from hardware sales, Microsoft's gaming content and services revenue was up a healthy-sounding 61 percent year-over-year for the latest reported quarter. But a full 58 percent of that increase was the "net impact from the Activision acquisition," which you may remember cost the company $68.7 billion dollars.
Microsoft no longer shares raw console shipment numbers like its competitors, so we don't know how many Xbox consoles are selling on an absolute basis. But industry analyst Daniel Ahmad estimates that Microsoft sold less than 900,000 Xbox units for the quarter ending in March, compared to 4.5 million PS5 units shipped in the same period. Overall, the reported revenue numbers suggest that sales of the Xbox Series X/S line peaked sometime in 2022, during the console's second full year on store shelves. That's extremely rare for a market where sales for successful console hardware usually see a peak in the fourth or fifth year on the market before a slow decline in the run-up to a successor. [...] Aside from hardware sales, Microsoft's gaming content and services revenue was up a healthy-sounding 61 percent year-over-year for the latest reported quarter. But a full 58 percent of that increase was the "net impact from the Activision acquisition," which you may remember cost the company $68.7 billion dollars.
Not surprised (Score:3, Informative)
The damn things run out of space so quickly and Microsoft in their infinite wisdom made it so Series X/S games can only be run from either the internal storage or their rather overpriced proprietary external expansion SSD card. Standard USB storage can only be used for backwards compatible games and as offline storage for Series X/S games.
Re: (Score:2)
Re: (Score:2)
Yeah, but m.2 flash drives are much faster than the proprietary Xbox flash drives.
The PlayStation 5 has proven this in the real world.
Re: Not surprised (Score:1)
That has nothing to do with the drive and everything to do with the optimizations Sony did to their file system and OS.
Re: (Score:2)
You completely missed the point. We are comparing a $90 device to a $250 one.
Re: (Score:1)
No. You said the PS5 m.2 was faster than the Xbox proprietary drives. In reality, they are both m.2 NVME drives, though the Xbox drive is in the shorter formfactor. Any significant speed advantage is because Sony designed the filesystem and OS for the PS5 to push those drives as hard as possible in order to minimize load times as much as possible. The only thing proprietary about the Xbox drive is the cart the m.2 NVME drive is held in to allow quick swapping of the drive. In theory a pretty good idea. Wher
Re: (Score:2)
The damn things run out of space so quickly and Microsoft in their infinite wisdom made it so Series X/S games can only be run from either the internal storage or their rather overpriced proprietary external expansion SSD card. Standard USB storage can only be used for backwards compatible games and as offline storage for Series X/S games.
My household got an Xbox Series S almost two years ago to replace a Halo green original Xbox (the Series X was really hard to find), and almost immediately there were arguments about what games would be installed because of the scarcity of adequate storage space. Some of the games are so large that you can really have just two X/S games installed at one time on a Series S. We have Game Pass Ultimate, but its usefulness is diminished by having to delete or move installed games from the internal drive to expe
Unless it's your only gaming platform (Score:2, Interesting)
From what I can tell both Microsoft and Sony are trying to figure out a way to maintain ownership of the platform so they can take a 30% cut of all the digital sales and DLC but also stop making the hardware where they lose money.
I don't see that working for either company. Sony doesn't own the PC platform so they can't do that and Microsoft is too evil so no game
Re: (Score:3)
It has been a long, long time since I seriously considered getting a game console. There are so few console exclusives that I would actually be interested in that the question never really came up again. And crap like overpriced storage? That is not even a question with a PC. Sure that PC runs Windows in my case, and that is a problem. But as a game-launcher, Windows actually works somewhat well. As do not read email or do any non-gaming web-surfing on it and most certainly do not use one-drive or an MS acc
PCs are winning? (Score:2)
I've always thought that the only reason to buy a console is that you can't deal with the complexity of running a PC - something that a lot of people really have problems with.
I wonder if this is due to the way nice computers are actually pretty cheap now? Or maybe gaming is just in a recession and this is one of the many things to feel the bite?
Re: (Score:2)
Good point. I do admit I struggle with Windows sometimes. Some of it is just way too obscure.
My guess would be pretty cheap computers you can reasonably game on, if FullHD is enough for you (for me it is). But a recession in gaming is also a good guess.
Re: (Score:2)
The main reason for getting a console is that It Just Works. Every game you play has been specifically tested and optimized on the exact hardware you have. No weird incompatibilities. No driver issues. No tweaking settings to figure out what you should turn on or off to get good graphics with a steady frame rate. Just install, launch, and start playing.
Re: (Score:3)
What they really need to do is cut the price on their hardware but I don't think they've been able to do that.
When you factor in inflation, $300 for a Series S wouldn't be bad if it didn't have so many caveats. Having no support for physical media, you're locked out of buying second-hand games for it, and it's nearly out of storage space from the moment you open the box.
Re: (Score:2)
There isn't much reason to own a console at all these days. The latest consoles might be able to run "better games" than a cell phone or a laptop, and can certainly do "better graphics" - but can you really notice? When the difference between running a game on the latest generation console and the previous generation console comes down to improved reflections, does anyone really care?
This and the staggering cost of developing a game that can use those improved graphics at all has ensured that there just are
Re:Unless it's your only gaming platform (Score:5, Insightful)
Bidenomics and the inflation it caused
Want to try again? If you look at this chart [ycharts.com] you'll see inflation was already on the upswing in 2021 when Biden took office. It then accelerated. And why might that be you ask? Because of the policies of the previous guy. That uptick in inflation was the result of people who were given money during covid and went on a spending spree [bloomberg.com]. You'll also note that inflation is almost back to what it was when Biden took office.
if you think things such as inflation immediately change when there's a new administration, you have no idea how economic policies work.
Re: Unless it's your only gaming platform (Score:2)
Re: (Score:3)
Well, don't ruin it for the haters by dropping facts.
It's astounding how ignorant people are of the economy when it seems to be such a driver of voting. My take on the economy since I've been alive:
Carter: inherited a bad economy that was on its way to getting worse; did nothing about it
Reagan: inherited a bad economy, but juiced it with de-regulation and - after a recession - ultimately put us on skates for the next decade and a half
Bush I: inherited a good economy, which went into a recession once the Re
Re: (Score:2)
Forgot to add, Trump initiated the end of globalization, which Biden doubled down on.
Re: (Score:3)
That uptick in inflation was the result of people who were given money during covid and went on a spending spree [bloomberg.com].
Inflation is never really attributed to a single cause. As much as I despise the orange moron the inflation experienced had little to do with the one of handout and everything to do with a large multivariate problem, international trade, supply chain problems, local spending power (that's not just handouts, but also people saved money by not spending it during covid), changes in consumer behaviour and purchasing being correct, etc.
There are countries who gave out handouts that didn't have bad inflation. The
Re: (Score:2)
The worst price jumps were in 2022. Grocery prices of items went up 10-20% a MONTH every month. I hate it when the government hides inflation. Then claim its 9% YEAR over YEAR. when prices go up 10% a month every month for seven consecutive months then your prices increased by more than 60%. Thats 60% inflation. But what they do is take the CPI and clImb it went up 9% on an index calculated since 1936. Well the CPI is already a percentage. So what they are doing is quoting you a percentage percentage of a p
Re: Unless it's your only gaming platform (Score:1)
Because instead of ending all COVID handouts once the lockdowns ended, Biden kept the handouts going in as many places as possible that would accept them until early 2023, which was IIRC when the last of them stopped. This meant you had the additional money supply along with people going back to work which significantly compounded the problem. Oh, and he didn't bother to prosecute any of the large scale fraud. Then he kept the budget at around 50% more than baseline prior to the COVID spending under Trump.
Re: (Score:2)
Cellphones should pretty much take out the vast majority of use cases. There's nothing to stop you connecting a bluetooth keyboard/mouse/controlpad to a cellphone, or connecting that cellphone to a large screen.
For 99% of users a dockable cellphone is ideal, carry it with you and use it anywhere, if you need a larger screen or keyboard you can have it.
Re: (Score:1)
Re: (Score:2)
Playing games on a phone sounds like an awful experience.
While I agree, those of us who grew up on consoles are now officially old fogeys. The current generation grew up with phones and tablets being their primary gaming platforms. For them the console is the weird one, not the phone.
Re: (Score:2)
Content vs PC is definitely a problem. We got a PS5 for particular games not yet on PC, but see no reason for an Xbox.
You are basically correct about Halo BTW. Halo 5 is the only one of the main installments not on PC, and you can beg or borrow an old XBone to play it.
It's really a miracle that Microsoft stuck it out this long (*bitter Windows Phone grumble*).
Re: (Score:2)
PS5 is working out great for Sony. Selling more or less at the same pace as PS4 did.
The stores are the big thing. We're at a point now where new console generations are backwards compatible with the last, and most people buy their games digitally. If you buy a new console, it runs the same games your old one did, but now they run better. There's a huge incentive for people to buy the same brand of console they bought las generation. Microsoft is struggling now because Sony outsold them like 3:1 last generat
Re: (Score:2)
From what I can tell both Microsoft and Sony are trying to figure out a way to maintain ownership of the platform so they can take a 30% cut of all the digital sales and DLC but also stop making the hardware where they lose money.
What they really need to do is cut the price on their hardware but I don't think they've been able to do that.
Nintendo beat them on that front.
I've been saying it for years, but the only way for a console manufacturer to retain relevancy long term is to have exclusive IP and cheap hardware. Sure, you can have multiplat releases and expensive hardware for a while, but eventually the competitor's hardware catches up and you have no reason for people to stick around. Worse, because we're all still waiting on a major computing breakthrough, that expensive console hardware is well down the path of diminishing returns
I'm going to guess (Score:4, Insightful)
Re:I'm going to guess (Score:4, Interesting)
Re: (Score:3, Interesting)
My hatred of Microsoft extends to its gaming console. The only reason I must use windows at all is for work, and the unpleasantness of the experience consistently reminds me of why I don't use anything with the "Microsoft" name on it in any other context.
I do almost all of my gaming on my Linux PC, which I built for this purpose. Thanks to Steam, the variety is more than good enough. And I probably will wind up with a Nintendo Switch 2 when they come out. That will already present me with more top-notch
Re: (Score:2)
Like you said, this is the point where sales normally start to fall off a little. PS5 sales didn't increase this year, and Sony commented that it means we're entering the second half of the PS5 cycle.
The problem here is that Xbox sales have been declining for a while and are now in a rapid freefall. That's a really bad sign for them.
Re: (Score:2)
If you read the full summary you'll see the part about how it is estimated the PS5 (which is pretty much the same age as the current xbox) is outselling the Xbox by around 5 to 1. So yeah, Microsoft has a problem.
Re: (Score:2)
Usually after 4 years a newer version of that generation comes out that comes in cheaper and less prone to heat issues. I have always been on the Playstation side, but the PS3 Slim, PS4 Slim, etc not only came in $100 cheaper, they ran cooler, and had less fan noise so were quieter. If they get the Series X to a price point of $350-$399 sales will climb again. Right now last gen consoles are still in demand as evident by the price of the used consoles are still considerably high comparatively. The market sh
Why does that not affect Sony? (Score:1)
if you wanted an Xbox, most people already bought one, and/or people just don't have as much extra money to spend...
Wouldn't the same thing be true of the PS5 though? Yet they have pretty robust sales still. Or at least much larger numbers than the Xbox now.
Re: (Score:2)
Because xbox exclusives run on PC at launch, unlike ps5 exculsives.
Re: (Score:1)
I agree, but that is a different reason than the ones listed that I said should also affect the PS5. I very much agree it's the PC taking down Xbox sales, so I don't think it's as much of a problem as it's made out to me by the summary.
Re: (Score:2)
IMO I think this goes back to the Xbox One. Microsoft really shot themselves in the foot with its release. It required you have the Kinect connected (requirement later removed), no Blu-ray playback (fixed with the Xbox One S), still wouldn't let you install your own storage media, and when they finally released the Xbox One X with had 4K gaming it was a year behind the PS4 Pro. Whereas with the PS4 you could install whatever 2.5" form factor hard drive or SSD you wanted, they didn't make any huge crazy chan
Re: (Score:2)
PS5 is where most of the gaming market is now, at least as far as AAA games go. PS4/PS5 have been the default platforms people go to first. Xbox has been the second choice for most people. Not many people are getting an Xbox now unless there's a big exclusive they want.
Even Microsoft doesn't fight it anymore. Most of their big games also release on PS5 now. They tried keeping big games exclusive to Xbox for a bit and it just resulted in the games underperforming.
Re: (Score:3)
if you wanted an Xbox, most people already bought one, and/or people just don't have as much extra money to spend...this is just one of the symptoms.
The following post is sarcastic and is clearly identified as such for the sarcasm detection impaired.
This proves Microsoft was right and that they need to acquire more game companies. Once these titles are exclusive to the Xbox, players will be forced to buy an Xbox. /s
Re: (Score:2)
It doesn't help that you don't have to actually buy an XBox to play the XBox exclusive titles. Many of them are also on PC, and the others are available using the XBox streaming service.
Good for MS (Score:2)
Not to mention, MS loses money on each unit sold. If you don't have one yet, you are probably not the type of person to be spending a lot on games, so MS is unlikely to ever recoup that loss from your purchase.
On the other hand ... (Score:2)
Xbox Console Sales Continue To Crater With Massive 42% Revenue Drop
Ironically, "Cratering Consoles" sounds like a fun game that might sell well. :-)
Should be expected, but is it a problem? (Score:2)
The Xbox market shrinking in size compared to the PS5 seems on the face of it to be a problem - but is it really?
Microsoft decided to make a strategic shift where basically all games would work on PC or Xbox, I'm sure with the intent of raising Windows PC sales.
It sure seems to me like that has worked, in that gaming PCs seem to be pretty popular again when at one point they had declined in popularity...
So aren't a lot of missing Xbox sales made up for by higher margin PC sales? And continued monthly Xbox
Re: (Score:2)
It sure seems to me like that has worked, in that gaming PCs seem to be pretty popular again when at one point they had declined in popularity...
Mostly that was a result of crypto-bros buying up all the mainstream gaming GPUs for mining. These days, you can get a decent gaming PC that's at least as good as an Xbox without breaking the bank too badly. With a PC, you've got the advantage of cheaper games, cheaper storage, and no monthly fees to play online (unless you're playing a game that happens to be subscription-based).
Re: (Score:2)
Do you need the monthly fees? Or is that the only way to get patches? And the games don't seem cheaper on PC, except that you can use more older games on it. New games are the same price on consoles as on Steam or GOG, barring randomized times when there are sales.
The PC advantage for me is that I already have a PC; I have old games I want to run on the PC; I want to mod a large selection of the games; and sometimes I want the keyboard or browser handy (yes, you can get a wireless keyboard for consoles b
Re: (Score:2)
There are drawbacks though. I can't coop with my friend who plays Elden Ring, because I'm on a PC and he's on an Xbox.
I dunno, to me that sounds like a drawback of the Xbox, not the PC. =P
Cross platform play is denied because of player-v-player fights (everyone whines that the other platform is full of cheaters, etc); but I just want coop. It's silly.
That depends on the game; there are many games that use cross-platform play just fine (I play Apex Legends cross-platform with no issues).
Also, I have to play sitting up straight in an office chair instead of slouching on a sofa...
Wireless Xbox controllers are basically plug and play with Windows. Just connect your PC to your TV and you're set, there are many ways to do this so one of them ought to work for you.
Re: (Score:2)
So aren't a lot of missing Xbox sales made up for by higher margin PC sales?
While there are the occasional games that are exceptions, the vast majority of full priced AAA game sales are on consoles. Most of the PC sales come when the game is dirt cheap in a Steam sale, so you don't make much money off it.
Also, Microsoft would make more money selling the games off the Xbox store than they would off Steam.
Nintendo? (Score:4, Funny)
Is it because everyone is waiting for the new Nintendo console? ...I'll get my coat
Re: (Score:1)
Re: (Score:2)
No but these days the PC is. There's not much in the way of xbox exclusivities anymore. Sony is still playing that game, they specifically release cross platform titles for which sequels only exist on the Playstation in an effort to sell more units, but Microsoft seems to have well and truly gone the other way.
Not enough ads (Score:2, Funny)
I think they can squeeze more ads into places... They aren't trying hard enough.
Oh, here's an idea, rearrange the UI again!
Maybe hire more diverse people?
IDK, one of those will probably work.
Adverts (Score:5, Insightful)
MS started shoving adverts for McDonalds which couldn't be removed from the dashboard. That's when I lost interest in using my Xbox, it's for games, it isn't for them to shill products I would never buy on me. That said, I've not used my playstation in a while either, been enjoying my Steam library and seriously looking at getting a Steam Deck.
Re: (Score:2)
Yeah, I will only buy consoles that don't have an Internet connection.
Unsurprising, when your titles/infra turn to junk (Score:2)
I am tempted to say that most of the blame lies with the whole 343/Bungie debacle. Halo has been the flagship game for those consoles for years, and the utter dumpster fire that is Infinite is really not helping the situation. This is what you get when you have an engine written (almo
PC gaming rocks, Haven't bought a console since. (Score:2)
I can get all the games I want off of steam and others. I can build my PC how I NEED IT. I have a Ryzen 5800X3D, RX6900X 32GB of ram and 2 x 2TB NVME's . It'll rock the doors off either console and I have a multitude of Game stores I can use Steam, GOG, Epic, Battle.net. So why buy a console and be locked into it's store ?? I'm surprised Playstation isn't having similar issues.
Re: (Score:2)
Google tells me just the graphics card for that is $1250.
I understand people have different spending priorities, different income levels, etc. But of course there's going to people who would rather buy a $500 console than a $2500 computer.
Gamepass price increase did it for me (Score:2)
I have both a PS5 and a Xbox Series X. Sadly the increase in gamepass has me canceling it and just buying 1-2 games a year that I actually plan to play. Turn out the PS5 has filled that role a lot better than my xbox. As PS plus is the same price as the old gamepass ultimate, I might just give it a try.