Xbox Sales are Better Than PS5 Despite a Decline

Xbox is a video game brand owned by Microsoft. It is one of the biggest console brands, having five consoles, many games, streaming services, and an online service called “Xbox Network”. The brand also has a development arm named Xbox Game Studios that has published numerous games over the years.

Xbox first came to the United States in the November of 2001, with the launch of the original Xbox console. Since then, it has seen notable success in the gaming industry. However, the recent earning report by Microsoft says otherwise.

Microsoft FY 2022
Microsoft’s Current Fiscal Year Report.

For the FY 2022 Q4, Microsoft earning report shows:

  • The Gaming revenue declined by 7% in the quarter ending June.
  • It implies $3.45B quarterly sales from Xbox (which is their 2nd best Q4 ever).
  • Content & Services was down 6%, again in-line with guidance, despite growth in XGP subs.
  • Hardware sales have dipped 11%.
Microsoft Gaming
Microsoft: Gaming Revenue, Trailing 12-Month Period (US$, Billions).
  • Assuming that the $3.45B in quarterly gaming sales, annual revenue from Xbox reached $16.22B.
  • Surprisingly, it is their highest fiscal year sales ever, even though it is down a bit on a rolling basis.
  • We estimate 77% from Content & Services.
Xbox Console
FY22 Q4 Financial Summary.
  • The company overall has generated $51.9B in quarterly revenue, up by 12%.
  • Operating income was $20.5B, which is an increase of 8%.
  • Microsoft Cloud revenue grew 28% to $25B.

The pure Xbox hardware sales are under wraps, but the earning report shows a 7% decline over the past three months. Although this may sound bad on the surface, we must highlight that this is their best fiscal year sales. Those numbers in the middle of global shortages are actually impressive.

Moreover, Microsoft CEO Satya Nadella commented saying:

We offer the best value for money in the video game industry. Our Xbox Game Pass subscription service includes access to hundreds of games, and the Xbox Series S is the most affordable next-gen console. We’ve sold more consoles to date than any previous generation of Xbox and have been the market leader in next-gen consoles in North America for three consecutive quarters.

The problem is apparent in their statement; the first-party games are not achieving the required performance, especially in Halo Infinite’s case. Microsoft is still working on the process of building an outstanding portfolio through numerous studio and publisher purchases.

According to them, the decline is expected to grow even further. If you are wondering about their recent investments, remember that Bethesda and Activision will only bear fruit later.

So what about the PS5?

The case with PlayStation 5 is simple; the availability of PS5 is now relaxing since many people got their console. Their business with scalpers is not present, and Sony is optimistic that their production will pick the pace sooner or later. Realistically, that is not a good mindset.

They still have many third-party games in the pipelines. As soon as they are released, PlayStation might see a bump in the beginning. That is even more true for God of War Ragnarök, which is essential for them.

More quarterly reports are expected to come in the coming days and weeks, which will be suitable for further comparisons. But statistically, Xbox seems to be doing great for the current situation. However, it does leave us wondering whether they will see a mega-hit once their investments in Bethesda and Activision pay off.

We can discuss more of that once the following FY report comes up. In the meantime, leave your thoughts below on Xbox’s progress and competition in the market.

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