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[Ozriel]

Hardware sales already down, 2 years into the Gen and with the Series S available and discounted constantly?

I don't get it.

You don't get 'revenue'?

It might be harsh, but that is the direction they will go, if Xbox doesnt change its future.

Investors wont sit down with a losing business.

How do you get 'losing business' from these numbers?

 

[diffusionx]

I don't think because it's just to many studios to close... Would be really bad.

They don’t have to close, Sega didn’t when they pulled out of consoles.

Xbox has never been a big performer for MS in 20 years. Out of all the key product lines and pillars, it's got to be the worst one out there compared to cloud, windows, MS Office, server stuff etc...

But it's still around.

And, believe it or not, some investors have griped over the years and said MS has no business being in console for just that reason. If their strategy for this generation does not pan out, I am hard-pressed to think there will be another.

 

[reksveks]

Here is the problem. If you bring out a product that displaces another then you must at the very least replace the revenue you displace, and ultimately you aim really is to gain extra.

Additionally the benefit and idea of things like service titles and Game Pass is to avoid the peaks and troughs of figures from hit titles. Instead you're aiming for a more steady flow of cash.

We are still seeing ebbing and flowing and it is failing to displace lost revenues.

It is, so far, a failure.

GP isn't going to fix all of macro engagement issues that the industry could be facing, we know software units are down double digits in EU/UK in Q4 and Sony highlighted lower engagement numbers in the previous earning call.

 

[DenchDeckard]

Is this vs year on year or last quarter?

 

[reksveks]

Is this vs year on year or last quarter?

always vs the same quarter in the previous FY aka October to December 21

 

[Sanepar]

They don’t have to close, Sega didn’t when they pulled out of consoles.


And, believe it or not, some investors have griped over the years and said MS has no business being in console for just that reason. If their strategy for this generation does not pan out, I am hard-pressed to think there will be another.

If they close the AB deal at least next 10 years they will try.

 

[FalsettoVibe]

Be interesting to see what Sony's results are on Feb 2nd.

 

[reksveks]

The earning call was a bit boring for gaming but got the following: MAU's - 120m in the quarter.

As always take MAU's with a pinch of salt.

 

[DenchDeckard]

always vs the same quarter in the previous FY aka October to December 21

Yeah, this is pretty much nothing burger then. Some of these takes are brilliant.

 

[kazuyamishima]

What major third party games dropped in Q4 besides the usual stuff? Callisto Protocol was a bomb. Midnight Suns and NFS likely underperformed. No big Ubisoft game like we usually get. Sales for Gotham Knights and Saints Row dropped off a cliff. Awful, awful year for third party software.

I think COD Modern Warfare II and Fifa 23 were bigger than their previous iterations and other third party games alongside other older releases.

 

[jroc74]

So the times I said MS is facing an uphill battle I wasnt trolling....this is what an uphill battle looks like.

Time to see what MS does in 2023.

 

[IntentionalPun]

But it's rather worrying if the only way a company can increase their gaming revenue is through buying up other gaming publishers and assimilating their revenue into their console division's. That ultimately is not a sustainable long-term growth option.

And you have the CEO of the company himself being bonused on Gamepass subs...

... and a mountain of evidence the only reason he opened up the pocket books is because he was sold on the idea of GP blowing up with xCloud usage...

I've been saying the same thing for years; if cloud doesn't take off to the extent that it actually starts looking like a large console userbase on it's own, then Xbox is going to be sold off.

 

[Hobbygaming]

I do not think you can blame the Chairman and CEO. May be he needs to review Phil Spencer performance. But I have a feeling he likes him

I know. It was just a silly joke lol

 

[Kacho]

Yeah it’s pretty clear Nutella only kept Xbox around because he saw an opportunity for growth with services and the cloud. If growth fizzles out for both so will his interest in keeping Xbox around.

 

[Topher]

Geez......mega-corp *only* makes $16 billion in profit and 10k lose their jobs.

I'm not judging Microsoft here. I get it. This is what businesses do. But damn....

 

[AJUMP23]

Got to have a holiday release. Get a tent pole game out on the holiday window.

 

[reksveks]

I think COD Modern Warfare II and Fifa 23 were bigger than their previous iterations and other third party games alongside other older releases.

Uk and EU gsd software numbers are down double digits for Q4

 

[reksveks]

Some of the Fy23Q3 forecasts

OEM decline another 30%
Device decline mid 40%
365 will be flat
Search grow high single digit
Gaming will decline high single digits, SW will decline low single

 

[TLZ]

Now replace face with Phil"s

 

[hinch7]

Maybe the block against the ABK aquisition from the FTC, is a blessing in disguise for MS..

 

[Elios83]

No significant new game releases and specifically targeting customers who don't have buying power will do that to you.

Their strategy was to provide a cheap hardware access point to a mass market audience promising these people that after that even the games would be really cheap to get through a subscription.
This is the big part of their strategy this gen and it is already fully in place and it's failing.
Are they going to try to shift production back to Series X or it's even a more dangerous bet?
The other part of the strategy is boosting the exclusive software output through big acquisitions and this is work in progress.
The Activision deal was probably supposed to play a big part in that but the future of that deal is now uncertain, what is certain is that it won't happen at the conditions Microsoft wanted (no COD at all on Playstation within 3 years, immediatly available only on GP day one).

An other point coming out of these results is the strong seasonality of the brand and their need to have a big title pushing sales for them during the holiday season, under these circumstances what is their big holiday season 2023 title? Do they have something else big planned outside Starfield and if not does it make sense to position that game as their next holiday season title even at the cost of an other delay? This point and the fate of the Activision deal will be huge things for them this year.

 

[fermcr]

Xbox really need those exclusives.
Relying only on hardware without exclusives will get you so far.

 

[Clear]

Based on those numbers I'd say their strategy is failing.

Content and services being down 12% is not good considering their focus on generating revenue through these offers. The idea being of course that by focusing on metrics like MAU that even slumping in hardware sales should only result in revenue rising more slowly than anticipated.

With hardware revenue and C+S both tracking down by roughly the same amount it shows that these things are performing in lockstep, which of course begs the question for shareholders to question where the value is in expending huge sums on the content and services side compared to previous years.

 

[poppabk]

The really alarming thing here is how early into the generation we are and how quickly the XBOX console sales are falling, despite the deep price cuts.

Where are people getting the console sales from?

 

[R3claimer117]

No way they’d close it, if anything I’m sure either Apple or Amazon could buy it. Nintendo and Sony wouldn’t be allowed even if they had the money.

Lmao that’s your hope isn’t it! Apple doesn’t have no interest in consoles neither does Amazon.

 

[R3claimer117]

Based on those numbers I'd say their strategy is failing.

Content and services being down 12% is not good considering their focus on generating revenue through these offers. The idea being of course that by focusing on metrics like MAU that even slumping in hardware sales should only result in revenue rising more slowly than anticipated.

With hardware revenue and C+S both tracking down by roughly the same amount it shows that these things are performing in lockstep, which of course begs the question for shareholders to question where the value is in expending huge sums on the content and services side compared to previous years.

Based on one quarter lol when it’s clear they’ve been up others when there’s content. If you don’t release any games it’s kinda hard to retain users who have other avenues to game .

 

[Kacho]

Where are people getting the console sales from?

Installbaseforum. They got some data leaks and put together charts. PlayStation market share is increasing while Xbox is decreasing.

 

[DenchDeckard]

Exactly in line with their predictions....guess someone's doing their job right over there.

 

[R3claimer117]

Where are people getting the console sales from?

It’s fake alarmist redderick. They didn’t for whatever reason produced enough series x suddenly the generation is over. Now when all their games are out this year including starfeild and console are available on shelf like series x and it’s still sitting or not selling well then let’s talk.

 

[a multicultural team of v]

No way they’d close it, if anything I’m sure either Apple or Amazon could buy it. Nintendo and Sony wouldn’t be allowed even if they had the money.

Here is a wrinkle to any potential closing situation: Google set the bar extremely high for customer protection/friendliness when they shut down Stadia. I know the situations are very very different, but it is the most recently example and will certainly be brought up as comparison.

Not that I would think they would ever just straight up shut Xbox down, if anything this is just further reason why they wouldn't.

 

[DenchDeckard]

Gamepass continues to see growth and highest MAU of 120 million....so some good news there I guess. Lol

 

[Pelta88]

 

[DarkMage619]

Xbox really need those exclusives.
Relying only on hardware without exclusives will get you so far.

I can't believe they haven't had any showcases of new software for their platform. Tomorrow at noon PST would be the perfect time but will MS do it? Who knows?

 

[IntentionalPun]

Thank god this bland motherfucker is around to say some bland shit about these results!

 

[deriks]

Everything declined, but revenue still was great, so they're still winning

 

[OmegaSupreme]

Ouch. No specifics on gamepass numbers eh? Just that it "grew" weren't they supposed to hit 30 million last March?

 

[bitbydeath]

Lmao that’s your hope isn’t it! Apple doesn’t have no interest in consoles neither does Amazon.

I’d rather it not be closed down, yes. Imagine losing legacy IP Doom, Wolfenstein etc just because MS can.

 

[Clear]

Based on one quarter lol when it’s clear they’ve been up others when there’s content. If you don’t release any games it’s kinda hard to retain users who have other avenues to game .

It really shouldn't be inline with hardware revenue though. The whole point on going big with digital services is its supposed to insulate the platform against variances within hardware sales. The idea being that things like the dips you get at generational transitions no longer apply, the audience is carried forwards as its about investment in the ecosystem not just the box. Something you can't really guarantee especially for casual gamers many of whom buy a piece of hardware purely to play "their" game, be it CoD, Fifa, whatever.

 

[Kacho]

Hope he’s getting paid well for these big brain takes. Very insightful stuff.

 

[Hobbygaming]

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

 

[Pelta88]

Hope he’s getting paid well for these big brain takes. Very insightful stuff.

He's tracking the decline in XBOX Series console sales. There's no need to slight someone for looking at the math. Unless of course, you think Microsoft's quarterly reports are inaccurate.

 

[ByWatterson]

Why is hardware down? Bizarre.

Sony might be back to eating Microsoft's lunch.

 

[Hobbygaming]

You know it's bad when Benji Sales can't find any positives

 

[Shakka43]

Some of you are acting like a 13% decline is the end of the world. It's not really that bad considering their anemic first party output.

 

[Ansphn]

lol at some people in here discussing a 2 trillion dollar company like they’re on their death bed cause their smallest division was down. I mean it’s expected there was no first party release all year except smaller games like grounded and pentiment.

Ask Zune, ask Mixer, and Microsoft phones. Xbox is in danger.

 

[Kacho]

He's tracking the decline in XBOX Series console sales. There's no need to slight someone for looking at the math. Unless of course, you think Microsoft's quarterly reports are inaccurate.

No. He’s regurgitating information that’s readily available and adding the most John Madden take imaginable.

“The Cowboys are down 10 points and it’s really not looking good for them. If they want to win the game they need to score more touchdowns, Pat.”

 

[reinking]

I expect a Game Pass price increase, or at the very least, the loopholes to close. Maybe around the Starfield lunch?

 

[ByWatterson]

Some of you are acting like a 13% decline is the end of the world. It's not really that bad considering their anemic first party output.

I mean you just made it sound worse.

"I'm not that unhealthy. I'm only suffering from diabetes because I have a food addiction."

 

[SenjutsuSage]

Looks at gaming numbers and realizes this is exactly the way Microsoft wants to be portrayed for the approval of the Activision Blizzard deal.

 

[reinking]

Ask Zune, ask Mixer, and Microsoft phones. Xbox is in danger.

I would not say Xbox is in danger right now but people that act like MS is going to lose money for any product indefinitely are being silly. As you pointed out, MS is not afraid to shutter a product or a service.