Microsoft Highlights First-Party & Xbox Game Pass Success In FY25 Q4 Earnings Report

@huroma I'd be more concerned if we weren't getting game support. I know there are a small number of specific examples like no rest for the wicked, Wu Kong and delays on BG3 (can't say I care much about the first two TBH) but then you have things like square enix back in the fold, marketing rights for ninja garden 4 and metaphor, and I'm like...nah this is fine right now.

I'm one of those who think Series X is their last console, properly speaking. Next machine is a custom Windows PC, backwards compatible with non-Play Anywhere titles via emulation.

Also, I would believe Steam will insist with a home device, this time with SteamOS. Console war is done, OS/service war is coming.

Exciting new hardware with new features sounds like a nice thing. I feel it's just at the point where Xbox makes gaming PCs whereas Nintendo and PS are still experimenting with new ways to play or enhancements. I'd like the rumored feature heavy Xbox controller to launch that adds gyro controls and more couch coop games would be welcome moving forward

@fbnaulin at this point that is written in stone. The next Xbox will be a PC/Console hybrid using AMD and running a light gaming focused version of windows 12. With a controller Ui. Which is the smart thing to do. Xbox Os will be on it and given out to OEM’s that want to build a Xbox Hybrid console. Which is going to be a nice machine. I’m looking forward to it.

It's impossible not to notice the steady decline of Xbox hardware. The Xbox Series market position is sad, and honestly, I don't think Xbox Ally will change that. I don't even think we can consider it an Xbox.

However, the overall results look really good for Xbox. Gamepass has approached $5 billion for the first time, and that's a figure that's starting to become very significant.

@huroma yeah hard to really form an opinion isn't it. My hope is that a complete alignment of Xbox console and PC takes place so that only one game needs to be coded for, at which point hardware sales don't matter.

Failing that, it's ps6 really, for all the things I don't care for with ps right now you at least know they're gonna be supported

I much preferred the times when we cheered for the games instead of the financials of these companies.

@huroma it became unsustainable 2.5 years ago which is why they pulled the plug and we are currently in the circling the drain phase. As Chris Farley said in Billy Madison, I know from experience dude.

My takeaway? You made $27 billion in a three month span. F*** you and your layoffs.

The takeaway is that MS is doing what MS does best, growing Software and Services. Its been that way for them since day 1.

@huroma I expect Xbox to fold into a PC like platform where all your old Xbox games can be played and new Xbox games just run off one PC code that you can play on the Xbox/MS Gaming device or your own PC device. A Windows store will remain to compete with EPIC and Steam on PC and is an area they are actively working on growing now.

Best revenue ever for MS Gaming and yet they decimated all gaming divisions a few weeks ago smh…

Is the 5 billion revenue taking into consideration expenses for paying to 3rd party publishers and the budget for making 1st party games? What is the actual profit after all those expenses?

@huroma No, the comparisons are year over year. Sales are down could be down a 1/4 (for example) versus the same quarter during the previous year. It's not a half-life.

The Series consoles will be 5 years old in November, and the next gen is coming 1-2 years from that point.

We’ve been hearing a lot more from Satya Nadella than from Phil Spencer lately and that’s not a good sign. It’s the business logic speaking, not the passion for gaming anymore. Satya Nadella doesn’t even care about videogames or consoles, he cares about cloud revenue.

The Microsoft board of directors led by Nadella since 2021 is focused on financial returns. Xbox hardware hasn’t been profitable since the Xbox 360 era and the console division as a whole continues to lose money. With billions spent on acquiring Activision-Blizzard, shareholders and Nadella himself expect significant returns, even if it means phasing out the Xbox console in the medium term.

In a nutshell: excessively rich, out of touch executives want to make more money and don’t really care how.

@fbnaulin I'm right there with you. I am considering that portable ROG in lieu of a Switch though. Other than that, it's all PC for me

@Coletrain

What support. They just fired the Forza Motorsport team.

Every single Xbox exclusive lost $100 or more.

@huroma how are you tied to a store on PC, you can have steam and epic games, gog on the same machine

@VoidPunk I don't like that they fired turn 10 but as a game, FM8 was trash. Low effort, nothing fun to do. Once I was over the initial thrill of it being a new game I drifted away quick.

I mean that we (consumers) are still being supported with games, I was replying to a comment around someone being worried about hardware sales affecting Xbox consumers. Not sure what you mean about the Xbox exclusives losing $100 though sorry

@HonestHick i thought consoles were already hybrid pc’s? xbox in particular was always referred to as being a pc in a box.

@huroma Its concerning, but not in the way people keep saying. For one we already know raw hardware sales are at least 30 million in 5 years. That's not bad. These are year over year percentage declines. What that means is that less people bought an Xbox this quarter this year than they did last year in the same quarter. That honestly doesn't say much when we don't know how many people bought an Xbox then. That's like saying I have 10% of "question mark". Then there's a LOT of reasons why hardware could be selling less this year in this quarter vs last year in the same quarter. Time is the most basic reason. With every year the Series consoles get older and people anticipate a new generation. This year also unfortunately saw price increases due to Trump's policies. Then there's the fact that last gen is still holding on. We saw PS's top sellers chart and a non zero number of games are still on last gen (GTA V & Minecraft) and some others are releasing cross Gen (COD). And that's only the paid games. There's still Microsoft's trash consumer marketing and poor regional support. And that's all BEFORE cloud gaming, day one PC, and multiplatform console releases. I think those three reasons in particular aren't really contributing as much as people want to think.

I'm disappointed in how nothing Xbox did or Playstation or Nintendo for that matter truly revitalized the console space. Like the best success we can point to is Nintendo, but they didn't really. They sorta just combined their handheld and home console market consolidating their user base. And that brought them up from the pitiful 13mil of the WiiU (in five years) and like 80 mil of the 3ds, but in terms of "growth" pure hardware sales are still much lower than peak for everyone. The Wii sold 100m and the DS like 150+ (so low balling 200m total) and yeah those would've had double dipping, but that's still another console sale. Nintendo doesn't have those number anymore and costs keep rising, so we see that cost put on gamers. We keep seeing the same for Xbox and PlayStation.

I don't suspect Xbox will go away. Microsoft reports higher player engagement than ever and higher spending than ever on their consoles specifically, but what Microsoft can't (none of them can) is really pull in NEW gamers. So stuff like subsidizing hardware and being aggressive with it makes less and less sense. I suspect Xbox will never do something like the Series S again nor will they do a mid gen upgrade like the Xbox One X. But they will probably continue to do their own proprietary hardware because that's a strong consumer base that continues to prove their value to the business. Then they'll just try to expand through a wider ecosystem that includes cloud and PC and other console platforms. My concern as a consumer is price related, but that's already worsening. Otherwise I don't expect Xbox consoles to disappear anytime soon.

The real significance to me is that gaming revenue has grown 10% you and we're now PUT of the massive ABK gains honey moon period. This shows Xbox's ability to grow beyond the massive boom they got from ABK and that it was indeed an investment.

The biggest concern from the earnings report overall is how well Microsoft is truly doing. Azure alone made 75 billion USD (that's how much ABK cost; more technically). And then you see all the recent cuts and the fact Satya Nadella himself said they were to "restructure for AI" and Microsoft's own researchers keep putting out jobs in danger of being replaced by AI. Phil Spencer as well stated that the Xbox layoffs and cancelations were coming at a time when Xbox was growing and doing better than ever. It's just all so bleak on the business and workplace side. As a consumer I can sit back and enjoy the games, and it's been a great year for first party releases from Xbox. But as a human being it's hard not to feel concerned in these times. It's certainly not just gaming, but the gaming industry is not immune and is a constant reminder of what's happening.

@huroma Not at all - 30m is still a respectable number considering the Console is NOT required at all. PC gamers aren't buying an Xbox to play the few 'exclusives' not on their Platform because Xbox release everything on PC and you don't need to upgrade to a Series Console as Cloud streaming still lets you play games on old hardware.

The fact that the console is only one of Microsofts Platforms, not the ONLY platform (like it is for Sony/Nintendo) means that they don't need to sell hardware to get you into their Ecosysytem, their 'Platform' whether that's through Cloud, Console or PC. Microsoft have their own platform(s) on PC, Sony only uses 3rd Party Platforms like Steam & Epic.

Microsoft can sell you their Game Pass Service which is part of their Platform on far more devices than just the Console. Ok so you may have stream some/all games to your device if the game doesn't run natively, but that's still playing on a Xbox, even if Virtual.

They don't need to make 'PC's' but have their own Platforms on PC. Battlenet and Bethesda.net are now MS PC Platforms too. PC maybe an 'open' platform, but that just means that multiple Platforms can exist on one device compared to a Console that is locked to a Single platform, single store.

That means that Xbox are 'unlikely' to ever sell as many Consoles as Sony or Nintendo, never likely to hit the same numbers they did during the 360 era when they completely neglected their PC platform and all their PC gamers. That doesn't mean that they won't 'settlle' for 30-40m Consoles if they think that enough people still want to buy a 'Console' to play despite the 'options' so will continue to make Hardware, just not in the same quantity.

@huroma we've already seen the future, which is the asus handheld thing. More of that, just with the ability to play legacy Xbox digital games.

@BAMozzy
To me hardware sales are irrelevant.

The first issue I have is that hardware sales do not translate to single users. I for example have 5 XSX and 1 XSS. I know i am not the norm but I help skew the numbers.

Second, PS as an example put out a pro again this generation, so how many of the sales are people with regular PS5's upgrading to pro?

Third, as you state I can be an XB player without ever owning an XB.

Hardware sales will continue to become more and more ridiculous over time. People can argue about including mobile games or not but I think Monthly Active Users is what MS cares about most. You addict people to your content and then they try to sell you more content and services through that content.

@NeoRatt Of course MAU's matter more than focusing on one specific 'product' - whether that be Hardware, Software or a Service (like Game Pass).

It doesn't matter where you play, what games/services you use or what platform you prefer, it just matters that you are 'engaging' with a Microsoft Product. If you play Candy Crush on Mobile or bought a Series X, Game Pass Ultimate and spent 100's of hours playing on that console - you are still just 1 Monthly Active User, still choosing to spend your time and money using a Microsoft Product and/or service! It still brings in revenue for them...

@nomither6 i mean in a lot of ways they are. I was saying that to other person. All that is really changing is MS is using a light version of windows and opening up the box. That’s really it. PS5 and Series X is just a closed down AMD Pc at the end of the day. You are spot on with that. 😊

@HonestHick
Agreed. A lot of these recent announcements are more announcement then real and actual change. Console hardware the past two generations has been PC based.

The real announcement was the availability of stores other then XB on XB hardware. Or as you said, "opening it up". To me that is a necessary step to promoting the hardware. Open it up so more gamers like Steam and Epic gamers can use the hardware. It makes the hardware you use irrelevant. Games and gaming services is where they make the money. Nobody makes money on hardware unless you are selling 100's of millions per year like Dell, Lenovo, HP, Asus, etc.

To me consoles should've always been a hardware spec and many manufacturers should be able to sell them. Let Omen, Alienware, ROG, all sell the hardware too, then gamers have real choice. You just buy XB certified hardware and all the game stores certify their games will work on the hardware. And let's go to one gaming profile across gaming networks. That way if I earn achievements on XB, Achievements on Steam, etc. they all show on my profile.

One hardware certification process, one gaming network, , many stores that compete to sell games at the lowest price, and publishers delivering the games that work on the hardware/gaming network. That would be consumer nirvana for gaming.

@huroma yes in the hypocritical world where the earth is struck by an asteroid tgat leaves you alive but takes out the servers where your games purchases are stored....sure