Microsoft reports a mixed bag in their latest financial report to investors. Xbox’s revenue is down year-on-year, but they saw an in increase in the amount of monthly active users (MAUs).
Microsoft CEO Satya Nadella confirms losses in both sales of hardware, and software and services. He explained these results this way:
““on a strong prior year comparable, with declines in first-party content and lower monetization in third-party content, partially offset by growth in Xbox Game Pass subscriptions”.
While not good news, Microsoft also told investors to expect this drop in prior financial meetings. As they had cited, the company was not able to prepare first party games for this financial quarter, and did not see enough high profile third party games for their platforms as well.
In the same quarter last year, Microsoft saw higher numbers thank to the release of first party titles Forza Horizon 5 and Halo Infinite. Their Game Pass service also saw the addition of several popular third party titles, including Final Fantasy XIII-2, Stardew Valley, Aliens: Fireteam Elite, Among Us, and Record of Lodoss War: Deedlit in Wonder Labyrinth.
Microsoft cited Game Pass as a popular service, that particularly proved a bargain for gamers through the leaner years of this pandemic. As of right now, Game Pass is not providing enough in value to keep all of Xbox’s numbers up, but there is an upside.
Microsoft saw an increase to 120 million monthly active users (MAUs), a record number for the service. Nadella summed this up for investors:
In gaming, we continued to pursue our ambition to give players more choice, to play great games wherever, whenever and however they want.
We saw new highs for Game Pass subscriptions, game streaming hours and monthly active devices. And monthly active users surpassed a record 120 million during the quarter.
We continue to invest to add value to Game Pass. This quarter we partnered with Riot Games to make the company’s PC and mobile games, along with premium content, available to subscribers.
And finally, we are energised by our upcoming line-up of triple-A launches including exciting new titles from ZeniMax and Xbox Game Studios, and we’ll be sharing details and gameplay at our showcase tomorrow.”
Microsoft recently laid off roughly 10,000 employees across the company. Those layoffs affected Xbox owned video game studios among others, namely, The Coalition, Bethesda Game Studios, and particularly 343 Studios, steward for the Halo franchise.
Microsoft seems to have covered their bases in terms of minimizing the harm from this drop in revenue, which they were expecting, with investors. Next, they will have to convince gamers they should stick around for the company.