Xbox hardware revenue down 42%, lowest level since Series S/X launch

Confirming the panorama already observed by numerous analysts, the Microsoft continues to strengthen as a major game distributor, while hardware sales have been losing relevance with each new financial report. According to data from the last quarter, Xbox hardware revenue fell 42%, This is the lowest level since the launch of the Series S and X. Last quarter, a drop had also been recorded, but with a not so low percentage, 31%.

On the other hand, the company recorded a 61% increase in its revenue from games and servicesreaping the rewards of numerous investments that add increasing relevance in terms of IPs. Overall, the gaming division’s revenue grew 44%. Activision Blizzard saw a 48% jump, while Xbox saw a 4% drop.

The company also disclosed that the Xbox has already surpassed the mark of 500 million monthly active users, considering all platforms and devices

The downward trend in hardware sales is also seen in other companies. According to Circana’s reportSony and Nintendo also saw double-digit percentage declines in May 2024. Analyst Christopher Dring mentions that console sales in Europe fell by 24% in the first six months of the year. The PS5 showed a 16% decline, the Switch, almost at the end of its cycle, fell by 32%. Xbox Series S and X fell by 37%.

The drop in revenue from Xbox sales was already expected by Microsoft. The company’s CEO, Sayta Nadella, had been predicting for a few months that console sales would show a new decline, a fact that has now been made official with the release of the balance sheet.

Among the main reasons for this are the lack of recent major first-party products, the time these products have been on the market, and even the strategy of positioning Xbox as an ecosystem, even embracing Amazon’s dongle, the Fire TV Stick, thanks to its integration with Xbox Cloud.

New generation of Xbox is assured

Microsoft will continue to invest in the Xbox as a console. In March, during an episode of the official Xbox podcast, Xbox president Sarah Bond reiterated an earlier statement from Phil Spencer, who confirmed that the next generation of the console is in development. And the company promises the biggest leap in performance ever seen!

Among the rumors, It is said that the company may abandon physical media altogetherfocusing only on the digital distribution of games, integrating several stores such as Steam and Epic Games, and even open the possibility for other manufacturers launch their versions of the console, starting from an initial project, similar to what happens with video cards, for example.