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Microsoft (MSFT) reports Xbox hardware revenue decreased 13% in Q4 2023

Gaming revenue was up for Xbox across its latest fiscal quarter, but hardware was a substantially lower contributor than usual.

TJ Denzer

July 25, 2023 2:20 PM

Image via Xbox

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Microsoft was among the latest tech companies to report on its most recent fiscal quarter. For Q4 2023, Microsoft posted a successful quarter in regards to revenue and earnings-per-share, but it didn’t come out ahead on all metrics. Notably, Xbox’s hardware sales were substantially down despite gaming revenue being up by a hair year-over-year. In fact, Xbox hardware was 13 percent lower in sales due in large part to lower console sales.

Microsoft posted its Q4 2023 earnings results on its investor relations website on July 25, 2023. While much of Microsoft’s business led to a solid and successful Q4 2023, with revenue beating expectations at $56.2 billion and earnings-per-share at $2.69 per share, not all was good news for the company. In its gaming section, the company reported that its overall gaming revenue was up by 1 percent year-over-year thanks to content and services such as Game Pass. However, hardware was down by 13 percent YoY, with the primary factor being less-than-expected sales of consoles.

Microsoft’s Xbox Series X and S consoles are great pieces of hardware, but they have been unable to gain the same traction as the PS5, which is continuing to see increased sales quarter by quarter. Unfortunately, the failure of the exclusive Redfall back in May didn’t help with this situation. However, Game Pass has continued to be a winning service for Xbox, and its accessibility on PC, console, and even mobile devices makes it less reliant on the success of the Xbox console ecosystem.

It will be interesting to see if Xbox is capable of turning its hardware metric around, but given the success of other factors at Microsoft, it might not do much to harm the company if things don't improve on that front. Stay tuned for more earnings results reporting as gaming and tech companies wrap up their latest fiscal quarters.

TJ Denzer

Senior News Editor

TJ Denzer is a player and writer with a passion for games that has dominated a lifetime. He found his way to the Shacknews roster in late 2019 and has worked his way to Senior News Editor since. Between news coverage, he also aides notably in livestream projects like the indie game-focused Indie-licious, the Shacknews Stimulus Games, and the Shacknews Dump. You can reach him at tj.denzer@shacknews.com and also find him on Twitter @JohnnyChugs.