Xbox CEO Asha Sharma says there’s still work to be done, as Microsoft’s latest financial reports show another decline in revenue for the Xbox division.
Microsoft‘s Q3 earnings report for the three-month period ending March 31 showed that Xbox content and services revenue was down 5% based on the same period last year. Hardware revenue, meanwhile, declined 33% year-on-year.
This is currently a recurring situation for Xbox – its Q2 earnings results also showed year-on-year declines of 5% and 32% respectively, while Q1 showed a growth of 1% in content and services but a 29% decline in hardware revenue.
Reacting to the latest financial results, Sharma – who took over from Phil Spencer in late February and therefore wasn’t in charge during most of the Q3 fiscal period – posted on X that Xbox will have to continue to work hard to turn around its fortunes.
“Xbox earnings today,” she wrote. “While we have made progress expanding the business and our margins, player and revenue growth has not yet met our ambition. We know we have work to do to earn every player today and into the future.”
During an earnings call discussing the latest financial results, Microsoft CEO Satya Nadella made a number of references to Xbox, noting that “foundational work” is currently being put in place “to win back fans and strengthen engagement”.
Nadella said the Xbox team “is recommitting to our core fans and players, and shaping the future of play,” adding: “Last week’s Game Pass changes are one example of how we are staying responsive to customer feedback.”
He also noted that Xbox “set new records for monthly Xbox active users in the quarter, as well as game streaming hours”.
During the same presentation, Microsoft CFO Amy Hood warned that a quick turnaround for Xbox isn’t realistic, and that it expects to see year-on-year declines in the Q4 period ending June 30 too.
“In Xbox content and services, we expect revenue to decline in the low-teens, reflecting a prior year comparable that benefited from strong first-party content, as well as the recent price changes for Xbox Game Pass as we focus on delivering more value to gamers,” Hood noted. “Hardware revenue should decline year-over-year.”
Last week Sharma shared a mission statement for the future of Xbox, starting with the rebranding of its Microsoft Gaming division back to simply ‘Xbox’.
Xbox also slashed the price of its highest tier Game Pass subscription and PC Game Pass last week, with Sharma claiming that the service has become too expensive for players. The platform holder also removed future Call of Duty launches from Game Pass, with analysts speculating that its inclusion into the service had made little impact on subscriber numbers.
