Microsoft gaming division reports second-best fourth-quarter performance amidst revenue decrease

Microsoft reports second-best fourth-quarter performance after last quarter's all-time high.

Image via Microsoft

On June 30, 2022, Microsoft Gaming reported fourth-quarter earnings that revealed a $259 million decrease from last year’s highest earnings ever in 2021, but also the company’s second-best fourth-quarter performance in revenue.

“Gaming revenue decreased $259 million or 7% driven by a decrease in Xbox content and services and Xbox hardware,” the Microsoft quarterly analysis highlighted.

“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.”

This most recent quarter was a slow period in regards to production by Microsft and their gaming division compared to last quarter’s many releases as well as the Xbox Game Pass Growth. Yet, even with these fourth-quarter earning drops, the drop in revenue is not all bad as the recent reports signify a top fourth-quarter performance.

“The decline you’re seeing in Xbox hardware is partly a reflection of the fact we had that launch about two years go,” Microsoft’s director of investor relations Kendra Goodenough told The Verge. “So with the supply constraints that we had seen over the last couple of years, it has kind of extended out that period for consoles.” 

According to market analyst @DomsPlaying, the $3.45 billion sales for Xbox makes it Microsoft Gaming Business’ second-best fourth quarter performance ever.

DomsPlaying elaborated further on the slight drop highlighting that “While that’s down a bit on a rolling basis, it’s the highest fiscal year sales ever for Xbox,” in response to his initial tweet.

Microsoft’s Gaming business experienced a record-breaking quarter in March 2022, where the division earned $3.74 billion in gaming revenue, up six percent year-over-year.