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[reksveks]

Gaming Summary:

- Gaming Revenue decline 13% (down 9% CC)
- Xbox content and services down 12% (down 8% CC) on a strong prior year
- Xbox HW down 13% (down 9% CC)

MS Summary:

Business Highlights

Revenue in Productivity and Business Processes was $17.0 billion and increased 7% (up 13% in constant currency), with the following business highlights:
· Office Commercial products and cloud services revenue increased 7% (up 14% in constant currency) driven by Office 365 Commercial revenue growth of 11% (up 18% in constant currency)
· Office Consumer products and cloud services revenue decreased 2% (up 3% in constant currency) and Microsoft 365 Consumer subscribers grew to 63.2 million
· LinkedIn revenue increased 10% (up 14% in constant currency)
· Dynamics products and cloud services revenue increased 13% (up 20% in constant currency) driven by Dynamics 365 revenue growth of 21% (up 29% in constant currency)

Revenue in Intelligent Cloud was $21.5 billion and increased 18% (up 24% in constant currency), with the following business highlights:
· Server products and cloud services revenue increased 20% (up 26% in constant currency) driven by Azure and other cloud services revenue growth of 31% (up 38% in constant currency)

Revenue in More Personal Computing was $14.2 billion and decreased 19% (down 16% in constant currency), with the following business highlights:
· Windows OEM revenue decreased 39%
· Windows Commercial products and cloud services revenue decreased 3% (up 3% in constant currency)
· Xbox content and services revenue decreased 12% (down 8% in constant currency)
· Search and news advertising revenue excluding traffic acquisition costs increased 10% (up 15% in constant currency)
· Devices revenue decreased 39% (down 34% in constant currency)

Microsoft returned $9.7 billion to shareholders in the form of share repurchases and dividends in the second quarter of fiscal year 2023, a decrease of 11% compared to the second quarter of fiscal year 2022.

Presentation Slides:

Tweets:

Earnings Call will be at https://www.microsoft.com/en-us/Investor/events/FY-2023/earnings-fy-2023-q2.aspx
Earnings Slide: https://www.microsoft.com/en-us/Investor/earnings/FY-2023-Q2/document/viewdocument/SlidesFY23Q2.pptx
Earnings Excel: https://www.microsoft.com/en-us/Inv...nt/viewdocument/FinancialStatementFY23Q2.xlsx

Will update when I get a chance.

MS cloud results probably helping the after hours results, up 4%.

 

[Elder Legend]

What do they expect when 343 is a dumpster fire and games are still not out yet.

 

[reksveks]

First thoughts:
- inline with forecasts (so didn't miss that too much in the MS segment)
- 13% HW decline is still real shitty
- 12% SW is a bit confusing to really determine, probably bad to the middle of the road given the UK/US/EU numbers. Will be interesting to see what the other big publishers are showing.

 

[Yoboman]

Lyin Jim Ryan must have stuck in and tampered with the books

 

[legacy24]

brutal

 

[Hobbygaming]

 

[SJRB]

Big oof.

 

[Zones]

- Gaming Revenue decline 13% (down 9% CC)
- Xbox content and services down 12% (down 8% CC) on a strong prior year
- Xbox HW down 13% (down 9% CC)

I blame this guy...

 

[Gudji]

 

[Nothing1234]

That hardware decline is not good reading at all.

 

[Hobbygaming]

 

[Kacho]

That Fortnite Series S bundle clearly did wonders with the zoomers.

 

[MDSLKTR]

Cue for a Sting song

 

[SlimySnake]

Overall revenue decline makes sense considering they had no first party games and pandemic era boost from 2020 and 2021 is no longer a thing.

Selling fewer consoles makes no sense considering the shortage is finally over and sales should be picking up in the second year of the gen anyway. If they have already topped out in year 2 then hitting 50 million is going to be tough unless they hit a Kinect like jackpot.

 

[48086]

Stock up almost 4% after hours? Nice.

 

[AlexxKidd]

Nothing another $70 billion purchase (and several more rounds of layoffs) can't fix.

 

[AtomicStarving]

There's absolutely no f reason for them to fire people from the gaming division, and they still want AB? What is happening here

 

[onQ123]

Time to bundle Office with Xbox Series consoles

 

[M1chl]

Call Bill Gates to do another pandemic
/s

 

[a multicultural team of v]

Time to bundle Office with Xbox Series consoles

Does Office run at 60fps?

 

[TVexperto]

what does cc mean?

 

[jm89]

Relying on series s has been a disaster, but probably there only choice if they wanted more consoles on shelves. Gonna have to put more Xs out and focus on that.

 

[Insane Metal]

Hence the layoffs.

 

[PSlayer]

Hardware numbers dropping at year 3 is bad.It may explain the recent layoffs...

 

[reksveks]

what does cc mean?

Constant currency so if the fx rates hadn't changed.

If you look at the UK for example, a year ago 1 gbp was accounted roughly as 1.35 usd, now 1 gbp is 1.24 usd so the top line revenue in usd has decreased.

Going offline (in the office tomorrow) but if anything interesting comes out of the earnings call just mention me and I will add to the OP.

 

[Crispy Gamer]

Way too early in the generation for hardware declines in retrospect Series S was a smart move because without a cheaper option god knows what type of position Xbox would be in I hated the idea but it's making more sense

 

[onQ123]

Does Office run at 60fps?

Depends on how fast you can type it VRW ( variable rate wording)

 

[marjo]

A bit of a mixed bag. The drop in content and services is completely expected given that last year they released Halo and FH5, Deathloop, etc. whereas this year they had very little software. The line about the decline being partially offset by increasing Game Pass revenues is also positive.

On the other hand, the drop in hardware revenue is not great.

 

[SJRB]

Now eventually you're gonna release some, eh.. you know, videogames after purchasing those 20 videogame developers, right?

Yes? Hello?

 

[Ash Sparrow]

Down from overperforming, time to get some games out though.

 

[diffusionx]

Hardware numbers down like that in year 2 of a console with increasingly supply is a disaster.

 

[Dick Jones]

Cue for a Sting song

He will play Fields of Gold while they call out the 10,000 former employees names.

 

[Hobbygaming]

what does cc mean?

Every business email going forward has to CC Nadella

 

[Unrivaledx88]

expected

 

[Black_Stride]

Hardware numbers dropping at year 3 is bad.It may explain the recent layoffs...

You are NOT that stupid.

 

[Flutta]

I blame the SW decline on GP.

 

[GHG]

Now it makes sense why they were trying to get all the bad news out in the last couple of weeks.

It's not loooking good brev.

 

[legacy24]

wait where's the gamepass subscriber count thought they released numbers on that

 

[thicc_girls_are_teh_best]

There's absolutely no f reason for them to fire people from the gaming division, and they still want AB? What is happening here

Did you look at the fiscal results? Gaming division is underperforming and seeing declines. I actually expect more job cuts from that division in particular, if anything.

All this also confirms they're tracking behind XBO in hardware sales now. If we could get a December NPD leak that would just solidify all these estimates.

Relying on series s has been a disaster, but probably there only choice if they wanted more consoles on shelves. Gonna have to put more Xs out and focus on that.

Still stand by the idea Project Keystone should have replaced Series S, and they should've kept marketing & messaging focused on Series X. At least they have the FH5 Series X bundles coming out now...not sure how well those will do (FH5 isn't exactly a new game and it's also in Game Pass at a cheaper price), but it's a start I suppose.

 

[Pelta88]

Gaming Revenue Down 13%
Xbox Content and Services Down 12%
Xbox Hardware Revenue Down 13%
1st party and 3rd party content Declined

 

[Thirty7ven]

Need to compare with the competition but on a first glance, gamepass up but everything down significantly? What happened to GP boosts software sales?

 

[Flutta]

wait where's the gamepass subscriber count thought they released numbers on that

Prob stuck at 24 mil.

 

[Ansphn]

Holy shit Hardware down 13% during the holidays when they dropped the pricing to $200 for the Series S and that had massive stocks. The end is near. Who would have thought that people buy gaming consoles to play great games. Someone please tell Phil Spencer.

 

[leo-j]

Hardware is down despite having a $199 Xbox series S available during the majority of the holidays?

 

[Raonak]

Surprised but not at the same time.

Xbox series feels like it's already on life support.

 

[mansoor1980]

party animal ...................no more

 

[SmokedMeat]

Savvy gamers prepaid three years of Game Pass for the cost of a few games. Not surprised gaming revenue is down. Might be down next year too.

 

[sloppyjoe_gamer]

 

[Skyfox]

They need some decent exclusives. Hopefully Starfield will help.

 

[Elios83]

Really disappointing results in all the gaming related aspects.
The sales failure of the super discounted Series S during the holiday season and the declining revenues in services (Gamepass) are especially concerning for them.
It's basically the whole "value" focused part of their strategy failing.
The other part is about boosting contents through acquisitions and here who knows how the whole Activision drama will end.