Microsoft has released its latest financial report. The Xbox division continues to grow, reaching over $3.7 billion in revenue for the quarter ending March 31.

Key takeaways

  • Microsoft reported quarterly revenue of $49.4 billion, which is up 18% year-over-year.
  • The company’s net income was $20.4 billion, which is up 19% compared to the same period from the previous year.
  • Xbox reached $3.7 billion in revenue, which is up 6% year-over-year. It was the best non-holiday quarter in the division’s history.
  • Content and services accounted for 81% of Xbox revenues, with the remaining 19% coming from hardware sales.
  • As pointed out by Niko Partners senior analyst Daniel Ahmad, it is also the first time Xbox’s content and services revenue crossed a $3 billion mark in a Q1 period.

  • According to Microsoft, Xbox Series X|S was the market leader during the first quarter among other next-gen consoles in the US, UK, Canada, and Western Europe.
  • Speaking of Game Pass, the company noted that total hours played by subscribers grew 45% over the past 12 months. Microsoft didn’t disclose the specific numbers, only saying that “billions of hours have been played” by Game Pass users.
  • However, growth of Xbox content and services revenue was below expectations, “driven by lower engagement across the platform, even as it remains above pre-pandemic levels.”
  • Microsoft also expects the latest shutdowns in China to negatively impact supply for Xbox consoles in the next quarter.
  • Taking into account this factor and lower engagement hours, the company expects its gaming revenue to decline mid-to-high single digits.

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