Microsoft has published the earnings results for the quarter ended September 30, 2021, and Xbox revenue has grown by 16% compared to the same time last year, primarily driven by demand for Xbox Series X and Series S consoles.
Of course, the Xbox Series X and S had yet to release this time last year, so the hardware revenue increase is a whopping 166%, while Xbox content and services revenue also saw a minor 2% increase.
"In Gaming, revenue increased 16% and 14% in constant currency, ahead of expectations. Better than expected console supply and continued strong demand resulted in Xbox hardware revenue growth of 166% and 162% in constant currency. Xbox content and services revenue increased 2% and was relatively unchanged in constant currency against a strong prior year comparable."
We were hoping Microsoft might be willing to share the current number of Xbox Game Pass subscribers as part of these results as well, but no updated number has been provided. The last official update (there have been rumours since!) came all the way back in January of this year, when Game Pass was confirmed to have 18 million members.
What are your thoughts on these earnings results? Let us know down in the comments section below.
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[source microsoft.com]
Comments 34
Maybe they will wait until January for gamepass figures, after Forza and Halo has arrived?
An improvement is an improvement and they have done rather well.
However they need to get more Series x made for the UK at least, they sell out in minutes over here.
More consoles sold, more game pass etc sold as simple as that.
As for the Series S thousands on the shelf’s in the UK and online in the main shops here. It’s like it doesn’t exist as a purchase now over here.
To me it was Microsoft’s only mistake so far this new generation. Some say it’s a little side console to sell, but it looks very bad they just sat there gathering dust. Then again I guess Microsoft can afford to take the no sales inventory hit and cost.
But it does look bad perception wise in the shops.
Who wants to buy something no one wants to buy.
Bodes well for the future, in like 5 years when all these studios finally have their games released.
Maybe the Game Pass numbers will be revealed on 20th anniversary.
@Snake_V5 Yeah, that's what I'm thinking.
Maybe we should consider that the Covid restrictions made 2020 an excelent year for gaming in general. So, if the numbers are almost the same, even with countries relaxing those restrictions and people going back to an almost normal life, that's very good, IMO.
I did a quick research for the revenues of the competition. In august, "PlayStation Helped Sony Beat Its Record Q1 Profits.
PlayStation 5 hardware sales drop, but software rises." (https://www.ign.com/articles/playstation-5-sony-record-profits-revenue-q1).
"Nintendo profits decline year-on-year as Switch hits 89 million sold" (https://www.theverge.com/2021/8/5/22610853/nintendo-earnings-q1-2021-switch-sales).
Ant Xbox, at the end of July: "Xbox hardware sales spike 172% as Microsoft reports $3.7B in quarterly gaming revenue" (https://www.geekwire.com/2021/xbox-hardware-sales-spike-172-microsoft-reports-3-7b-quarterly-gaming-revenue/).
Let's wait for the game pass numbers, but everything seems really fine.
So a new console increases revenue and hardware sales shocking
@uptownsoul Okay
@CrazyJF
I did think that could be the only saving grace in the UK with the series s on shelf’s.
No Series X or PS5 available, so sort of last choice for Christmas.
Time will tell, but the UK like the new best tech and will probably wait.
@Rural-Bandit
Yes I would have gone digital Series X for £360 in the UK same as PS5 digital.
It would have sold many more than the series s has or ever is going to sell in the UK.
@FraserG @Snake_V5 if rumors are to be believed, they were about to release numbers a while back until a rumor of “22 million” subs took off and they felt the real number would seem as bad news so they didn’t reveal the numbers.
If true, I would say the recent “30 million” rumors might do the same yet again.
Make more more Series X consoles and less Series S consoles for the UK market please Microsoft.
Jesus, why are my writing this? Miicrosoft aren't reading it.
@Dezzy70 I think MS's priority was the overwhelming majority of gamers that do not 'need' 4k capable GPU's when they are connected to HD TV's.
There maybe a subset of people that want the most powerful hardware and willing to sacrifice the disc player to save 'some' money but for most, inc Parents the Series S is more than adequate and comes in at a 'reasonable' cost too. I don't know many Kids, young adults etc with 4k 120hz VRR enabled TV's in their bedrooms in the UK and for those that do, there is a Series X for them. There are many countries all over the world where people don't have 4k TV's so the Series S is perfectly adequately.
MS are also working to allow 'anyone' to play any of their games on any 'device' to bring gaming to the masses. Its not just for 'elitist' with the 'money' to buy the latest hardware and if you can't afford to pay for 'specs' you don't need, you miss out.
Maybe the Series S isn't the most popular in the UK amongst the 'hardcore' gamers, but could sell more because Parents buy their kids one for their bedrooms, buy one for the spare room or because they have a HD TV etc. I thought it made more sense than Sony's Disc vs Discless as MS's is also HD vs 4k in a world where the majority of TV's are HD...
@BAMozzy
Well if the UK parents or UK youngsters want them for their bedrooms, then not many bedrooms have them as they not selling well at all for a new generation console only a year old nearly.
Kids want the best tech and the parents go get it or the kids save for it, probably more so in the UK.
Kids have £1000 mobile phones, they don’t need them that powerful or with so many features but they have them, kids have £400 I pads.
Microsoft judged this wrong in the UK and piss poor sales show this. That’s is the evidence loud and clear sitting on shop shelf’s. Some of my local stores have not sold any in weeks.
@BAMozzy
It’s is also well known that the Nintendo Switch is more the UK bedroom, front room, roam around console.
We want full powered Series X and PS5 not a tissue box in disguise of a console 😂.
You know I’m a massive Xbox fan been there since day one on day of release.
I just say what I see in shops and online sales wise and within my group and also what others have purchased in their household and what they intend to buy, UK only down south of course.
@Rural-Bandit
You can open up your PS5 and expand the ssd memory. I guess you know that.
Revenue is nice but I’m far more interested in the EBITDA of the Xbox division. Just curious if this is sustainable or not.
@Dezzy70 although I do agree that MS has over estimated the demand for the Series S I still firmly believe it has got them sales they would not otherwise have achieved. The majority of my gaming friends are all PS, always have been. This generation some have invested in a Series S to go with their PS5, they would not have forked out full whack for a Series X as a second console so that's money in MSs pocket that wasn't there last gen.
On the same note if Sony ever dropped a Series S counterpart I would snap one up in a heartbeat.
@FraserG @Snake_V5 @Tharsman Also hoping to see updated numbers soon but I suspect they may wait for Jan 2022 after Halo and Forza, which should give them a healthy bump.
To be clear the the "30 million" rumour was always WAY off target, it never made ANY sense logically. You don't go from 18M in Jan to 30M in Sept with Flight Sim and Psychonauts 2 at the growth rate they had. As good as those games are, they aren't system/sub sellers in big numbers.
Regardless we have a pretty good idea where this will be right now. These are the numbers they have officially announced or we have seen in their public financial documents.
If we assume the "more than 15 million" is between 15 and 16 million (pretty safe to do so) this makes it between 20.6 million and 22 million as of 30 Jun 2021 for 37.48% year on year growth.
Regardless of what Microsoft's target may have been for FY2020 that is a solid gain.
@themightyant I also think that they wouldn't want to squash the 30 million rumour as it's a pretty good rumour to be going about haha. r
Either wag, so long as it's growing it's working, which means I get to keep playing games day one on GP 😀😀😀
@Dezzy70 Agree with you. Have a mate who's a casual gamer and is desperate for PS5 for xmas for his kids but obviously can't get one. I recommended the Series S as a quick check shows everyone has them in stock but he wasn't interested even though it sounded perfect for him. He's thinking of going to CEX where they are still £720 to buy! Can't believe we're still at that point a year later!
I am one of those hardware sales for last quarter😁
It would be so awesome to see if Series X/S can be the first to xbox system to sell 100 million units..
@StonyKL
That is exactly what I try to say on here from personal experiences and stock in shops.
UK young and old want the best tech for that particular model be it PS5 or Series X and probably Switch now with the OLED model.
The odd few don’t but that is little in numbers else there would be no Series S left on the shelf’s for probably months now. Not selling and not due to restocks being large, just not selling.
@Chidoro It's a shame they don't break it down by division on their 10-K (I checked) or we could easily work this out!
@FriendlyOctopus I think i'd be fuming, it only makes real gains look worse by comparison! Yes it's growing at a good rate and isn't going anywhere anytime soon. Which is good for us!
There's an argument to be made that you don't want it to grow too quickly or they can move away from the user acquisition phase which typically involves higher prices and less good value all round. So I wish them success, just not too much
@StonyKL If you REALLY want a PS5 (for a whole variety of valid reasons, including friends on the platform, engagement with their IP, feeling locked into their digital ecosystem etc.) then a Series S isn't going to cut it. Same Vice-versa if you want an Xbox.
Personally I know a few people who have bought a Series S and are really happy. For some it's basically the gateway drug to Xbox and Game Pass. I agree they've over estimated Series S sales in the UK and maybe other places but it's a great system that fits many budgets, users and territories. It's unlikely to ever be very popular on an enthusiast site like this though.
I've been pretty happy with my Series S, but I do still have my One X for the enhanced games (and my physical games).
I've been trying to sell my friend on the Series S. He's still on a base XBO console, so literally any of the new consoles will be an upgrade. He won't budge though; just knowing the Series X exists he's insistent on waiting. That's fine and all, he can do what he wants, but he's going to be getting more and more hard-pressed to stick to his XBO when we're playing the newer multiplayer games without him.
I have a feeling he (and the other holdouts) will eventually grab a Series S as a "for now" console until the X is more readily available. But right now we're still in the cross--gen phase. The FOMO will win out eventually.
@XxEvilAshxX I went from a one x to a series s and have zero complaints other than the backward compatibility not being as good. The ssd makes a huge difference. But I really just play call of duty and fifa.
The UK is a 'small' market and not representative of the 'world'. Its not as if there isn't a more powerful option for the UK market with the Series X.
Wanting a Series X and 'benefiting' from a Series X is 2 different things. If you only have a HD TV, then you are paying all that extra money for a Bluray player. The extra resolution etc is not going to make any noticeable difference when its sampled down to 1080p...
However, MS also want to offer 'next-gen' gaming around the world - not just the most 'affluent' countries. The Switch has its own niche too and not necessarily the 'better' Bedroom option.I would rather play Doom, Wolfenstein, Witcher 3 etc on a Series S, the Switch won't play Flight Sim, Halo, Forza, Perfect Dark, Fable, Avowed, Starfield, Redfall etc etc so it maybe a 'better' option for some. Not everyone likes games made for 3yr olds and the 'worst' ports of the 'few' new releases to want a Switch.
The Series S is also great for all those people looking for a 'secondary' device to play MS Exclusives or for 'casual' gamers who may never 'buy' a game - make do with Game Pass (and/or Games with Gold) for their library.
Its not as if the UK gamers who want the 'best' hardware spec possible are being let down by MS as you can buy a Series X for that - even if its a 'waste' of that hardware specs because you have a HD TV.
@BAMozzy I’ll likely end up with several series s just because they are so cheap and I have multiple floors with TVs.
@Rural-Bandit
Normally plug and play is always preferred
To messing around with screws and taking items apart and also making sure you get the right memory/ heat sink device in the first place.
I will probably end up doing it for some PS5 owners as I did with the PS4 internal disc swap.
Yes overall I think it is very poor of Sony to have this type of memory upgrade messing about.
Technologically should be about a better and easier quality of life, Sony have done the opposite with internal memory upgrade. How long have we had plug and play memory, usb etc.
it is a backward step and slightly pathetic for a company of Sonys electronics history.
Not to mention 16% of a few billion dollars is still a significant amount of money. It's not "just" 16% of the previous year's revenue, it's 16% MORE.
@Rural-Bandit
Overall Sony did start the better game wise from release date onwards so far.
But with FH5 and Halo on there way and hopefully more next year and in some cases very marginal third party games being a little better, Xbox can gain some ground this generation, I think more so towards the 2023/4 years with maybe elder scrolls, fable, new gears of war, new Forza etc etc.
Anyway great time for us gamers either way 😊
@Rural-Bandit @Dezzy70 There’s pros and cons to each method, plug and play is nice on Xbox, but let’s be real it’s REALLY not hard on PS5. Takes less than 3 minutes if you know what your doing. Less than 5-10 if you don’t. It’s a molehill not a mountain. 😂
But the BIG advantage is price. Considering just how expensive these SSDs are that’s a really huge deal for many. (It certainly is for me) The PS5 option is already FAR cheaper (and that’s for a faster drive too)
1TB is about £140 vs £200 today on Xbox
2TB is about £310 vs £400+ (Unannounced price)
But more importantly prices keep tumbling for gen4 m.2, whereas other than occasional very limited sales (great if you bagged one), or ordering from overseas, the Xbox Seagate drive barely changes price from its £220 RRP.
By xmas/NY sales the m.2 drives will be even cheaper relatively. Microsoft/Seagate REALLY needs to be more competitive here.
This is always a personal choice but for ME I’d take the minor added inconvenience, and lack of plug and play, in order to save around £100. But each to their own.
I went for a Series S as I don’t have a 4K tv and could just go and pick one up straight from the shelf.
Been very happy with it so far. Lovely little design and loving the faster loading times. Yes the internal drive is small but I’ve just got into the habit of downloading games overnight.
A console that can play Flight Sim for only £250 is a proper bargain in my eyes. I’m sure that at some point in the future I’ll need a new TV and then I might consider a Series X and by then they’ll be easy to pick up.
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