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MS Earnings Call - FY23Q2 |

Arsic

Loves his juicy stink trail scent
Need games to sell game consoles and software. Shocker.

Gamepass can’t save shit if all these acquisitions don’t churn out a few bangers.

This year should be good for them with Starfield and a new Forza. If they throw in Hellblade 2 at last and anything else then they can start pumping those numbers up.
 

Umbasaborne

Banned
Definitely think there is a future where ms closes the xbox division and sells the devs and ip, still, hate to see it. They seem to have trouble getting triple a games out the door, which certainly isnt helping them
 
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Looks at gaming numbers and realizes this is exactly the way Microsoft wants to be portrayed for the approval of the Activision Blizzard deal.

Mike Tyson Smile GIF

I am feeling dizzy, having been subjected to the spinniest spin I have ever gone through! Respect! đź‘Ťđź‘Ť
 
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These are quarterly reports. This report also covers sales during the holiday period where consoles are most in demand, globally.
They also didn’t have series x to sell it was sold out. Again I’m not sure if they’re underproducing them or are making their numbers look bad to gain favorable with regulators. There’s a weird thing going on with them holding games and also with Sony as well I know tin foil hat and all but they haven’t had a showcase either in the midst of all this activision stuff.
 
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
yep, it certainly was. without the killer combo of series s + game pass, & after 2 years of next to no major exclusives? i'm not sure where xbox'd be as a brand right now...
 
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Indyblue

Member
I’m a little concerned about the future of Xbox at this point. They just aren’t releasing games. I bought one first over the ps5 cause of gamepass and back compat (haven’t had an Xbox since 360 early days) with the hope that all those studios would start releasing games. I will get a ps5 this year regardless but if they don’t release GREAT games soon and start to take off this year and next, I could genuinely see them dropping hardware altogether and start releasing games on PS. I mean, while a lot of us buy both, I don’t think most people do and if they wait too long, they will run out of time.

I really like gamepass and quick resume so I hope Xbox can become (or remain) a healthy platform.
 
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I am certain the games will be coming out, if only because MS has bought so many goddamn teams, that even their legendary mismanagement will not prevent them from having a plethora of bangers in the near future. The question is wether the current Sony lead, and the momentum that they have built since the second part of the PS3 life cycle will continue to grow stronger with each month MS does not right its wrongs. During every generation, there comes a time when the winner is declared by the mass market, regardless of the subsequent efforts of the competition: A console/system is crowned, and the word of mouth/general enthusiasm create an impenetrable invincibilty halo (no pun intended!) that carries over to the very end. I think that 2023 is the most important year for the SX/SS...If Sony's lead extends significantly over the next 12 months, it will be it, until 2028 and beyond.
 

gokurho

Member
They also didn’t have series x to sell it was sold out. Again I’m not sure if they’re underproducing them or are making their numbers look bad to gain favorable with regulators. There’s a weird thing going on with them holding games and also with Sony as well I know tin foil hat and all but they haven’t had a showcase either in the midst of all this activision stuff.
YEP, MS is making their numbers look bad to gain favorable with regulators.
In fact, it's clear that MS won against Sony.
 
Halo Infinite wasn't a big AAA game with tons of hype?
Halo Infinite had f2p multiplayer. It was never intended to sell Game pass. You didn't need Game pass to play half the game. I don't know why people bring up that title over Forza which clearly was meant to attract people to Game pass.

I’m a little concerned about the future of Xbox at this point. They just aren’t releasing games. I bought one first over the ps5 cause of gamepass and back compat (haven’t had an Xbox since 360 early days) with the hope that all those studios would start releasing games. I will get a ps5 this year regardless but if they don’t release GREAT games soon and start to take off this year and next, I could genuinely see them dropping hardware altogether and start releasing games on PS. I mean, while a lot of us buy both, I don’t think most people do and if they wait too long, they will run out of time.

I really like gamepass and quick resume so I hope Xbox can become (or remain) a healthy platform.
You realize there is a showcase for up coming games TOMORROW right? Decide how concerned to be after watching the show at least.

Is 20 years that people says microsoft close the xbox division 🤣
People have wishing, hoping, and praying for MS to exit the games industry for over 20 years. Why stop now?
 

ZehDon

Member
Halo Infinite wasn't a big AAA game with tons of hype?
A game that was mocked across the internet from the day it was revealed? No, I don't think Halo Infinite quite qualifies. Apart from old fans coming back to see if 343i delivered (spoiler: they didn't), no one really cared about Halo Infinite because it didn't do anything worth caring about.

I'd argue that Forza Horizon 5 already served as an example, but Starfield certainly has a larger appeal. It's a fair barometer. If Starfield is a decent game and it doesn't work out on Game Pass, I'd probably say nothing would. All eyes on Todd "Sweet little lies" Howard to deliver.
 

Pop

Member
We all know they just want to go 3rd party anyways and have gamepass on every possible system
 
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Jaybe

Member
I am certain the games will be coming out, if only because MS has bought so many goddamn teams, that even their legendary mismanagement will not prevent them from having a plethora of bangers in the near future. The question is wether the current Sony lead, and the momentum that they have built since the second part of the PS3 life cycle will continue to grow stronger with each month MS does not right its wrongs. During every generation, there comes a time when the winner is declared by the mass market, regardless of the subsequent efforts of the competition: A console/system is crowned, and the word of mouth/general enthusiasm create an impenetrable invincibilty halo (no pun intended!) that carries over to the very end. I think that 2023 is the most important year for the SX/SS...If Sony's lead extends significantly over the next 12 months, it will be it, until 2028 and beyond.
Agree with this especially the last part. There are network effects applicable in this space where the winner builds momentum. Truthfully this gen is only so close as it was due to the supply chain constraints preventing Sony from coming out of the gate with the advantage they had from the end of PS4 gen. And I actually think due to digital purchases, backwards compatibility, and paid online subscriptions that last gen was the most crucial of all to win given it wouldn’t be a fresh break to the extent of historical gens.
 
YEP, MS is making their numbers look bad to gain favorable with regulators.
In fact, it's clear that MS won against Sony.
Dude what I’m saying has nothing to do about them beating Sony but it wouldn’t look good for them arguing to get the biggest publisher in gaming why posting record breaking numbers for them that would make no sense.
 
Yeah Microsoft is Ivan the terrible. Everyone selling consoles, they selling race to the bottom gaming buffets.

They need to buy Ubisoft while they are at it. Fuck it.

Im becoming less and less convinced MS can just buy the gaming carpet right out of Sony’s and Nintendo’s feet.

I actually would love to see them buy multiple publishers. Ubisoft will be a hard one after Activision.

This news makes Playstation look like a powerhouse, when they are actually minuscule in entertainment.
 
I think Starfield will be the first real test of what a big AAA game with tons of hype can do for Gamepass, should be interesting to see what happens.

They really need for it to be a system seller if they care about "console sales". Their messaging is weirdly inconsistent.

If I were Microsoft, I would be working with Sony and Nintendo as much as possible to get GamePass on their systems.
 
A game that was mocked across the internet from the day it was revealed? No, I don't think Halo Infinite quite qualifies. Apart from old fans coming back to see if 343i delivered (spoiler: they didn't), no one really cared about Halo Infinite because it didn't do anything worth caring about.

I'd argue that Forza Horizon 5 already served as an example, but Starfield certainly has a larger appeal. It's a fair barometer. If Starfield is a decent game and it doesn't work out on Game Pass, I'd probably say nothing would. All eyes on Todd "Sweet little lies" Howard to delive

A game that was mocked across the internet from the day it was revealed? No, I don't think Halo Infinite quite qualifies. Apart from old fans coming back to see if 343i delivered (spoiler: they didn't), no one really cared about Halo Infinite because it didn't do anything worth caring about.

I'd argue that Forza Horizon 5 already served as an example, but Starfield certainly has a larger appeal. It's a fair barometer. If Starfield is a decent game and it doesn't work out on Game Pass, I'd probably say nothing would. All eyes on Todd "Sweet little lies" Howard to deliver.
If You think that Xbox will start selling more consoles than PlayStation because of starfield... lol
 
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Is 20 years that people says microsoft close the xbox division 🤣
I mean...and a few years ago MS themselves considered closing the division so...

Not saying these results are alarming for them. That's just stupid, but let's not pretend that thought is that weird or that MS themselves never thought about it when they did.

I also think that this year will be crucial to them. Imagine if Starfield and their 1st party games don't really give Gamepass the boost MS is expecting and they keep missing their targeted numbers for the 3rd year in a row...they may change a few things about their strategy going forward for sure.
 

Three

Gold Member
What's strange about this is that these were the projected numbers 3 months ago so why the doom and gloom? I wonder how people will react if they see other manufacturers down too.
 
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reksveks

Member
Nadella was only sold on that because Phil convinced him Xbox could align with their wider services-orientated growth goals.

If that doesn't pan out (if Xbox doesn't see a big uptick in sales or revenue because of Game Pass), what will the next pivot sales pitch be? AI? I'd love to see how Phil Spencer sells Satya on Xbox's importance for AI, just to see what he would say.
One interesting topic is the importance of an internal gaming division to push Gaming services within Azure not just streaming but also distributed/cloud based development (similar to what Haven are working on). Whether that requires Xbox at all or the size that it currently is a fun thing to think about.

But anyways, transcript of the QA, mostly azure and openai

https://seekingalpha.com/article/4572123-microsoft-corporation-msft-q2-2023-earnings-call-transcript
 
This isn’t affecting them in the least bit some are just using this to push Microsoft get rid of Xbox agenda nothing more. The division was performing fine when they had software to release I’m sure it will recover as the year goes on when they’re putting out games. To act like it’s the end times is absurd.

It's also important to note that we are in the middle of an economic downturn and the primary markets for Xbox (US & UK) have been consistently down YoY in both hardware and software sales over these quarters (from the NPD and UK sales data). While these same issues will undoubtedly effect PS in these regions as well, the fact that Sony is stronger globally helps it offset any slowdown by increasing supply in some of the European markets that had previously been woefully under supplied.

Plus, there is the obvious issue of MS discounting the systems this last holiday when they didn't the year before. Even if unit numbers were identical, you start chopping $50, $80, or $100 (in some rare promos) off the price per unit sold and that revenue number is going to take a hit.
 
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Fess

Member
People have wishing, hoping, and praying for MS to exit the games industry for over 20 years. Why stop now?
Who would want that? It’s the competition that makes the industry what it is today. With MS gone and nobody else stepping in stationary consoles would end up in a sleepy Switch scenario with weak hardware and long generations with no price drops and software quality would likely drop too.
 

diffusionx

Gold Member
If they close the AB deal at least next 10 years they will try.
My point was that they don’t really *need* a console to make and sell sell video games. They would be a very large publisher with the studios they have, even bigger with Activision obviously. Tencent, for example, doesn’t have a console as far as I know.
 

Jaybe

Member
Thanks. Was curious on any acquisition talk and the only comment on Activision was their continued push to see it close by June 30, 2023.

Now moving to our Q3 outlook, which unless specifically noted otherwise, is on a U.S. dollar basis. My commentary for both the full year and next quarter does not include any impact from Activision, which we continue to work towards closing in fiscal year 2023, subject to obtaining required regulatory approvals.
 

Heisenberg007

Gold Journalism
I see some weird takes and spins in this thread. A few questions:
  • Why did Xbox console sales decrease? In year 2, console sales usually increase. It means there's less demand than before, which is concerning. On the other hand, PS5 sales are increasing. That is a bad signal.
  • Third-party software sales decreased in a quarter that Call of Duty MW2 launched in? That doesn't sound good, but we should wait for Sony's results to see if other factors were involved.
  • It is clear that Gamepass is not helping increase software sales like the initial claim was.
  • Talking about Gamepass, where are the numbers? It has been 370 days since they last shared Gamepass subscriber count. Microsoft doesn't share console numbers because, apparently, "console sales do not matter; Gamepass subs matter." But they don't share Gamepass numbers either now. There should be more noise about that, so we at least get some data from them.
 
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.
Well, Sony finally has their supply issues sorted.
 

Lyrical

Banned
I’ve got about a year and a half left on my GP sub and based on how it is today I won’t be renewing. Come on Xbox make use of those studios dammit!!
 

yurinka

Member
I think this year with Starfield, Forza and Minecraft Legends plus completing the acquisition they should start to recover, and then to continue growing the following years thanks to a big amount of very appealing first party content plus having got rid of chips shortages.

If they don't achieve that, then I think they should consider to forget to make another generation of consoles (at least by themselves, they could license the brand as their own 'Steam machines' manufactured by 3rd parties) after the current one and instead to start doing a Sega and transition to a full multiplatform 3rd party publisher in consoles.

I think they aren't in an alarming, dangerous point right now, but could be in a couple of years if they don't see a big improvement after the acquisition.

Well, Sony finally has their supply issues sorted.
Seems this quarter was the best one ever for PS5 hardware sales, but the amount of units sold in countries like Japan or Spain continues to be too small compared to the normal PS sales, with isolated weeks with higher than usual isolated bumps. I think they are still supply constrained. Maybe sorted the issue in some countries, but in other ones seems to be still there.

I see some weird takes and spins in this thread. A few questions:
  • Why did Xbox console sales decrease? In year 2, console sales usually increase. It means there's less demand than before, which is concerning. On the other hand, PS5 sales are increasing. That is a bad signal.
I assume due to lack of big exclusive big sellers for that quarter, while the direct competition was getting a new GoW and a new Pokemon.

  • Third-party software sales decreased in a quarter that Call of Duty MW2 launched in? That doesn't sound good, but we should wait for Sony's results to see if other factors were involved.
Considering it has been the best quarter ever for PS5 HW sales and that GoW debuted with record numbers I assume that Sony will also have good software numbers for the quarter.

  • It is clear that Gamepass is not helping increase software sales like the initial claim was.
Well, I think their real idea was the opposite: to sacrifice game sales to get instead revenue from a lot of subscriptions and since these games would get more players than with full priced sales, to get also more revenue from addons (mtx/dlcs/season passes/etc).

  • Talking about Gamepass, where are the numbers? It has been 370 days since they last shared Gamepass subscriber count. Microsoft doesn't share console numbers because, apparently, "console sales do not matter; Gamepass subs matter." But they don't share Gamepass numbers either now. There should be more noise about that, so we at least get some data from them.
Normally when they stop sharing numbers it's because they aren't proud of them. Every quarter they mention growth, but as I remember some months ago MS mentioned to a number that was like 25M, but maybe did choose that number because it was the last shared one. Maybe they aren't stuck at 25M.
 
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Tutomos

Member
The thing about Starfield is, most people will get it on PC. PlayStation would be its second largest base if it were multiplatform, but not a lot of people will jump ship just for that.
 
Seems this quarter was the best one ever for PS5 hardware sales, but the amount of units sold in countries like Japan or Spain continues to be too small compared to the normal PS sales, with isolated weeks with higher than usual isolated bumps. I think they are still supply constrained. Maybe sorted the issue in some countries, but in other ones seems to be still there.
Jim Ryan came out and stated they sorted issues and supply will pick up starting from last years holidays.

It shows, as PS5 outsold Series S/X during the holidays, despite Xbox price cuts.
It also shows in the decline in HW sales for MS.

Xbox in general is in decline. These numbers fall in line with statements from Spencer saying Xbox is becoming irrelevant.
 
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yurinka

Member
Jim Ryan came out and stated they sorted issues and supply will pick up starting from last years holidays.
I know he said that in CES. But the following weeks still shown weak numbers for Japan and Spain, this is why I mention it. I assume they probably got way more units than before per quarter, but they decided to focus these units in a few countries, probably their best selling ones (USA, Germany, UK).
 
I know he said that in CES. But the following weeks still shown weak numbers for Japan and Spain, this is why I mention it. I assume they probably got way more units than before per quarter, but they decided to focus these units in a few countries, probably their best selling ones (USA, Germany, UK).
US and UK makes the best sense businesswise, as they directly compete with MS in those markets.

If they dominate in those markets, it's exit for Xbox.

Which, again, shows in these earning calls and Spencers statements lately.
 
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Heisenberg007

Gold Journalism
Considering it has been the best quarter ever for PS5 HW sales and that GoW debuted with record numbers I assume that Sony will also have good software numbers for the quarter.
Yeah that's what I'm assuming. God of War must have told 7+ million copies by now in this quarter alone. COD MW2 sold bonkers, mostly on PlayStation. Other games like Miles Morales, Horizon Forbidden West, GT7, TLOU, and TLOU 2 continue to sell. I also think PS software sales would be up, but let's wait and see.
Well, I think their real idea was the opposite: to sacrifice game sales to get instead revenue from a lot of subscriptions and since these games would get more players than with full priced sales, to get also more revenue from addons (mtx/dlcs/season passes/etc).
That was the inherent (common sense) idea, but not what Xbox leadership said. According to Phil, Gamepass also increases sales.


"When you put a game like Forza Horizon 4 on Game Pass, you instantly have more players of the game, which is actually leading to more sales of the game," he said. "Some people have questioned that, but when State of Decay 2 launched, you saw if you looked in the US at the NPD you saw this game selling really well the month it launched on GamePass.

Normally when they stop sharing numbers it's because they aren't proud of them. Every quarter they mention growth, but as I remember some months ago MS mentioned to a number that was like 25M, but maybe did choose that number because it was the last shared one. Maybe they aren't stuck at 25M.
Yeah, but that's so disingenuous. We'll brag about numbers when they're good and go radio silent for over 370 days when they are bad.
 

Havoc2049

Member
Considering all Microsoft released last year was Grounded, Pentiment and a bunch of old Bethesda and id games to PC Game Pass, it wasn't that bad of a year. Forza Horizon 5 Hot Wheels was cool and Sea of Thieves had a decent amount of new content.
 
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