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Microsoft Earning Report FY22 Q4 | Gaming Revenue Down 7% YoY

R

reksveks

Member


0bqOH6Q.png


Chart coming later

Office Commercial products and cloud services revenue increased 9% (up 13% in constant currency) driven by Office 365 Commercial revenue growth of 15% (up 19% in constant currency)
Office Consumer products and cloud services revenue increased 9% (up 12% in constant currency) and Microsoft 365 Consumer subscribers grew to 59.7 million
LinkedIn revenue increased 26% (up 29% in constant currency)
Dynamics products and cloud services revenue increased 19% (up 24% in constant currency) driven by Dynamics 365 revenue growth of 31% (up 36% in constant currency)
Click to expand...
Revenue in Intelligent Cloud was $20.9 billion and increased 20% (up 25% in constant currency), with the following business highlights:
Server products and cloud services revenue increased 22% (up 26% in constant currency) driven by Azure and other cloud services revenue growth of 40% (up 46% in constant currency)
Click to expand...
Windows OEM revenue decreased 2%
Windows Commercial products and cloud services revenue increased 6% (up 12% in constant currency)
Xbox content and services revenue decreased 6% (down 4% in constant currency)
Search and news advertising revenue excluding traffic acquisition costs increased 18% (up 21% in constant currency)
Surface revenue increased 10% (up 15% in constant currency)
Click to expand...

PR: https://www.microsoft.com/en-us/investor/earnings/fy-2022-q4/press-release-webcast
Slides: https://view.officeapps.live.com/op...?version=070ad1a9-5b58-9554-efe7-3162f36099d8
Excel: https://view.officeapps.live.com/op...?version=4b77d141-5aee-513a-f3d6-0c75d647ef3e

Summary:
- Gaming revenue declined 7% in quarter ending June. In-line with estimate.
- Implies $3.45B quarterly sales from Xbox, the 2nd best Q4 ever.
- Content & Services was down 6%, again in-line with guidance, despite growth in XGP subs.
- Hardware sales dipped 11%.

@mods, could you just change it to 'Gaming revenue down 7% YoY'
 
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PhaseJump

PhaseJump

Banned
Good. I can't wait for them to ramp up acquisitions for Xbox.

Most of the entertainment I get out of being an Xbox customer is speculating on what big publishers and franchises they will grab and use to drive the industry, and whether or not I will be dead from old age before any of it happens.
 
Jaybe

Jaybe

Gold Member
  1. Figured content and services would decline since they telegraphed that at last quarter, and no big releases.
  2. I wasn’t sure where hardware would land. Sales still seem strong but hard to know of top of my head where the prior year was at given supply challenges.
  3. On this Q4 being their 2nd best Q4, I mean I kind of expect with the model they are pursuing that every ‘whatever quarter it is’ should be the best.
  4. GP growing still is good for them. Curious what the driver was. This was a weak quarter comparatively to others for releases. Maybe the event beating the viewers over the head with it helped. Maybe some golds members have expired and started up as GP. Not sure when the PC $1 promo was. Hard to lose subs as many are locked in with the 3-year conversion method.
 
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oldergamer

oldergamer

Member
Jaybe said:
  1. Figured content and services would decline since they telegraphed that at last quarter, and no big releases.
  2. I wasn’t sure where hardware would land. Sales still seem strong but hard to know of top of my head where the prior year was at given supply challenges.
  3. On this Q4 being their 2nd best Q4, I mean I kind of expect with the model they are pursuing that every ‘whatever quarter it is’ should be the best.
  4. GP growing still is good for them. Curious what the driver was. This was a weak quarter comparatively to others for releases. Maybe the event beating the viewers over the head with it helped. Maybe some golds members have expired and started up as GP. Not sure when the PC $1 promo was. Hard to lose subs as many are locked in with the 3-year conversion method.
Click to expand...
There's a percentage of new hardware sold tied directly to gamepass. I like the way it has 400 games, but they still advertise GP has 100+
 
Jaybe

Jaybe

Gold Member
oldergamer said:
There's a percentage of new hardware sold tied directly to gamepass. I like the way it has 400 games, but they still advertise GP has 100+
Click to expand...
That’s a good point. Probably a fair number that buy in are subscribing or a part of that ‘all access’ package that bundles it in at a monthly rate.
 
E

El Pistolero

Banned
Something tells me they might be interested in Sega, which would make sense, imo. The two companies have had a good relationship since the first Xbox days. Plus, MS, by acquiring them, would get a big japanese RPG in Persona, the Yakuza series, and a ton of classic Sega IPs to revive in the future.
The only issue would be recruiting talent in Japan, but you never know, really...
 
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SlimySnake

SlimySnake

Flashless at the Golden Globes
Gaming Revenue should be up with a bigger install base and far better hardware sales than last year.

The fact that its down just shows how important it is to deliver exclusives instead of relying on third parties. Third parties have dropped the ball this gen, and this is where first party shouldve come in.

MS needs to go on a hiring spree instead of an acquisition spree to get games out faster.
 
R

reksveks

Member
Just trying to see in the context of the NPD numbers but its a pain cause of mobile but

HW -1%
Accessories -11% (If you group them together, -5%)
SW - 13%

Mobile is the big unknown
 
oldergamer

oldergamer

Member
Rivet said:
Gaming revenue being down 7 % despite all their efforts and investments doesn't look great.

Hardware sales being down 11 % is also worrying so soon in a new generation. Still, future AAA games could turn things around fast.
Click to expand...
Dude, use your head. They predicted both being down well ahead of the announcement. You're forgetting that there is still a hardware shortage, and we are in the summer months.
 
Jaybe

Jaybe

Gold Member
El Pistolero said:
Something tells me they might be interested in Sega, which would make sense, imo. The two companies have had a good relationship since the first Xbox days. Plus, MS, by acquiring them, would get a big japanese RPG in Persona, the Yakuza series, and a ton of Sega classic IPs to revive in the future.
Click to expand...

They probably are interested in Sega however some analysts think Microsoft have set their sights on a much bigger fish:

Microsoft’s earnings follow news that it will serve as the technology provider for Netflix’s upcoming ad-supported subscription tier. But analysts from both Needham and Goldman Sachs told Yahoo Finance they’re skeptical of the move, with Needham’s Laura Martin speculating that the team up is part of a long-term Netflix strategy to get Microsoft to buy the streaming business.
Click to expand...
 
yazenov

yazenov

Gold Member
Damn those numbers don't look good for the gaming division.

I guess the sales are down due to lesser demand from the launch. Those hardcore consumers who wanted one already bought it for Halo and so forth. And the delay of Star field added fuel to the fire.

If the recesion hits the economy in the next 6 to 12 month its going to be rough for MS.
 
Rivet

Rivet

Member
Lognor

Lognor

Banned
Rivet said:
Yes, I doubt those disappointing numbers are due to hardware shortages, Xbox consoles are mostly available these days.

The lack of major AAA releases is probably a better explanation.
Click to expand...
They've only been more readily available for maybe the past month.

But you know what? PS5 has been more readily available too! Sony and MS are finally solving some of these supply issues. Still a ton of demand, but Sony and MS are able to produce more now and actually get them onto shelves.
 
oldergamer

oldergamer

Member
Rivet said:
Yes, I doubt those disappointing numbers are due to hardware shortages, Xbox consoles are mostly available these days.

The lack of major AAA releases is probably a better explanation.
Click to expand...
You're obviously trolling. "Disappointing" numbers? stop the spin, its clear you didn't read the OP. Its right inline with predictions and they made more money this quarter then ever, despite hardware shortages and lower demand after the pandemic.
 
Salty Popsicle

Salty Popsicle

Banned
Even with inflation taking an ever larger chunk of consumer wallets these past 6 months and the price of oil continuing to skyrocket, it seems people are unwilling to allow their gaming habits to take a backseat. Another strong quarter for Microsoft gaming division and the best ever fiscal year says a lot about the Xbox brand in general especially considering all the recession fears.
 
Topher

Topher

Identifies as young
Rivet said:
Yes, I doubt those disappointing numbers are due to hardware shortages, Xbox consoles are mostly available these days.

The lack of major AAA releases is probably a better explanation.
Click to expand...

I don't think these numbers are disappointing either way. Last year, Microsoft reported Xbox hardware sales had skyrocketed 172%. That was due to massive demand during a launch year. Hard to top that. I'm actually impressed the hardware revenue only dropped 11%. Regardless, stock has still not been consistently available.
 
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M

MrA

Member
SlimySnake said:
Gaming Revenue should be up with a bigger install base and far better hardware sales than last year.

The fact that its down just shows how important it is to deliver exclusives instead of relying on third parties. Third parties have dropped the ball this gen, and this is where first party shouldve come in.

MS needs to go on a hiring spree instead of an acquisition spree to get games out faster.
Click to expand...
Don't be surprised if Nintendo and Sony are both down too, 20 and 21 were nuts years, and a tough act to follow
 
Azelover

Azelover

Titanic was called the Ship of Dreams, and it was. It really was.
pramod said:
Isn't it just revenue though? The report doesn't mention if the gaming division is actually profitable.
Click to expand...
Says 20.5 billion in Operating Income. But you're right, I confused it with gaming division. Sorry. It's too much money for a gaming division, I should have noticed.

If they're still not talking about it they're probably not making a whole lot. So ignore my comment please.
 
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