According to Microsoft’s recent Q4 2022 financial report, Xbox Game Pass has helped offset gaming revenue losses which have been reported to be $259 million or 7%. So this is another indication that Xbox Game Pass seems to be doing fine for Microsoft and isn’t going anywhere despite many industry veterans questioning its model.
Gaming revenue decreased $259 million or 7% driven by a decrease in Xbox content and services and Xbox hardware. Xbox content and services revenue decreased 6% driven by lower engagement hours and monetization in third-party and first-party content, offset in part by growth in Xbox Game Pass subscriptions. Xbox hardware revenue decreased 11%.
Despite the loss in revenue, Q4 2022, was the second best quarter for Microsoft’s gaming revenue. Xbox Hardware revenue also declined which can partially be attributed to supply issues. Microsoft has promised 5 Xbox first party games in Fiscal Year 2023. Redfall and Starfield are confirmed to release in first half of 2023 which leaves us with three more unannounced Xbox First Party games. Hopefully, we will hear about them more soon.
According to Microsoft CEO Satya Nadella, Xbox Series S|X is still fastest selling console in Xbox’s history:
We’ve sold more consoles life to date than any previous generation of Xbox and have been the market leader in North America for three quarters in a row among next-gen consoles.
So overall, things are looking good for Xbox and with Microsoft trying to bring its services to virtually any device including TVs, the gaming division is expected to show even better results.