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[reksveks]

Gaming Summary:

- Gaming Revenue decline 4% (down 1% CC)
- Xbox content and services up 3% (up 5% CC) due to growth in GP
- Xbox HW down 30% (down 28% CC)

MS Summary:

Business Highlights

Revenue in Productivity and Business Processes was $17.5 billion and increased 11% (up 15% in constant currency), with the following business highlights:

· Office Commercial products and cloud services revenue increased 13% (up 17% in constant currency) driven by Office 365 Commercial revenue growth of 14% (up 18% in constant currency)
· Office Consumer products and cloud services revenue increased 1% (up 4% in constant currency) and Microsoft 365 Consumer subscribers grew to 65.4 million
· LinkedIn revenue increased 8% (up 10% in constant currency)
· Dynamics products and cloud services revenue increased 17% (up 21% in constant currency) driven by Dynamics 365 revenue growth of 25% (up 29% in constant currency)

Revenue in Intelligent Cloud was $22.1 billion and increased 16% (up 19% in constant currency), with the following business highlights:
· Server products and cloud services revenue increased 17% (up 21% in constant currency) driven by Azure and other cloud services revenue growth of 27% (up 31% in constant currency)

Revenue in More Personal Computing was $13.3 billion and decreased 9% (down 7% in constant currency), with the following business highlights:

· Windows OEM revenue decreased 28%
· Devices revenue decreased 30% (down 26% in constant currency)
· Windows Commercial products and cloud services revenue increased 14% (up 18% in constant currency)
· Xbox content and services revenue increased 3% (up 5% in constant currency)
· Search and news advertising revenue excluding traffic acquisition costs increased 10% (up 13% in constant currency)

Microsoft returned $9.7 billion to shareholders in the form of share repurchases and dividends in the third quarter of fiscal year 2023.

Presentation Slides:

Tweets:

Earnings Call will be at https://www.microsoft.com/en-us/Investor/events/FY-2023/earnings-fy-2023-q2.aspx
Earnings Slide: https://www.microsoft.com/en-us/Inv...3/document/viewdocument/SlidesFY23Q3.pptx/URL] Earnings Excel: [URL]https://www.microsoft.com/en-us/Investor/earnings/FY-2023-Q3/document/viewdocument/FinancialStatementFY23Q3.xlsx

- Azure OpenAI being using adept and inflection (???)
- 2000 openai service costumers, up 10x
- Unilever went all in on Azure
- OpenAI using CosmoDB for Chatgpt.
- 76% of the fortune500 using github
- bunch of people using Github CoPilot
- Powerplatform usage up 50%
- Cloud for sustainability used by BBC.
- Teams up to 300m MAU, 60% of customers buy Teams room or one of the other additional software like premium or hardware.
- Record monthly windows devices
- 930m LinkedIn users, 100m in India
- Bing up to 100m monthly usage (??)
- Bing grew share in the US and Edge grew for the 8th in
- Q3 record in terms of gaming MAU
- Revenue from subs grew to 1bn
- 500m players across first party titles

Will update when I get a chance.

 

[reksveks]

Mod of War can I change the X% to 4%?

 

[analog_future]

Not as bad as I was anticipating. Hardware sales being down is expected with Series X consoles still being so hard to find.

Surprised to see content and services actually continuing to grow despite this rough patch.

 

[Poltz]

Hardware down 30% is worrying.

 

[MikeM]

That hardware number is concerning if they want to grow more GP subs. I wonder what the console/PC GP split is.

 

[GHG]

Mod of War can I change the X% to 4%?

Throw the hardware decline in the title as well while you're at it.

I'll be tuning into the earnings call. Looking at the initial reaction and the fact that it's based on beating sandbagged guidance/estimates there's a big opportunity here going into tomorrow.

 

[Spyxos]

Gamepass is running good, but Hardware is way too low. It will be interesting to see what the numbers look like after Starfield.

 

[XesqueVara]

Shares rising 4%, as long Azure is growing Investors are gonna be pleased.

 

[feynoob]

Not having starfield last year is seriously hurting them badly.

GG Phil spencer. You let the platform down by not having any 3rd party AAA games ready incase of an event like this.

 

[Solidsnake_1]

 

[reksveks]

Hardware down 30% is worrying.

it is, the disconnect to software and content is weird.

 

[DaGwaphics]

You hate to see the hardware decline, but hopefully they can get back in to marketing mode a bit with the upcoming showcase and move past the "we're so bad" shtick they were kind of forced into with the ABK deal.

At least GP numbers are still going up.

Insert that "we still have GP" gif the ponies like to use.

 

[ChorizoPicozo]

doom and gloom talk™

 

[Luigi Mario]

Their next acquisition is already being prepared.

 

[LordOfChaos]

Microsoft said to plan to close Activision deal despite FTC suit - report

Microsoft (MSFT) is preparing to close its planned $69 billion acquisition of Activision (ATVI) even as the Federal Trade Commission has sued to block the deal

seekingalpha.com

Hard not to see Xbox in a dire place without this going through, and we're yet to fully feel the impacts of their 10,000 layoffs which heavily hit Xbox

 

[ChuckeRearmed]

With 53B in revenue and 18B in net income within 3 months, they can buy whatever they want


Interesting that Game Pass allowed them to get increase in revenue in content services. Hi Fi Rush did its job I guess

it is, the disconnect to software and content is weird.

Not necessary. I think content includes PC. And that's actually without mobile. The fact is that despite hardware being down, they were able to gain in content services.

 

[Spyxos]

http://[URL]https://seekingalpha.co...close-activision-deal-despite-ftc-suit-report

[/URL]

Is FTC so powerless that MS don't even care about them?

 

[Pelta88]

The 30% decline is troubling. But when you take a step back and look at their hardware decline, quarter after quarter, since the launch of Series X Coupled with the stats Microsoft released to regulators, The reality is that XBOX console sales are like...

 

[Heisenberg007]

Did we get new Game Pass subscribers number?

It has been almost 450 days since we last got any update from Microsoft.

 

[feynoob]

Topher
It seems phil was wrong. Gamepass seems to be doing more than 15%.

 

[ChorizoPicozo]

Did we get new Game Pass subscribers number?

It has been almost 450 days since we last got any update from Microsoft.

wait until they reach 100 M subs at the end of this year.

 

[XesqueVara]

Is FTC so powerless that MS don't even care about them?

Its just that MS can go to the Court and crush them here.

 

[ChorizoPicozo]

Topher
It seems phil was wrong. Gamepass seems to be doing more than 15%.

phil is always wrong.

 

[feynoob]

The 30% decline is troubling. But when you take a step back and look at their hardware decline, quarter after quarter, since the launch of Series X Coupled with the stats Microsoft released to regulators, The reality is that XBOX console sales are

2022 no first party game effect.

Did we get new Game Pass subscribers number?

It has been almost 450 days since we last got any update from Microsoft.

Maybe this june(hopefully). Its been so long since they stopped reporting it.

 

[adamsapple]

Supply constraints.

 

[Gudji]

30%?

 

[feynoob]

Is FTC so powerless that MS don't even care about them?

FTC doent approve the merger. MS will take the court if they still insist on blocking it.

 

[GHG]

Supply constraints.

 

[ChuckeRearmed]

I do wonder why content and services grew 3% despite hardware being 30% comparatively to the previous Q3 2022 that was the highest (hardware wise) for Xbox.

Game Pass and game sales I guess (and aside Hi fi Rush they did not release anything - I presume April releases are not included right?)

 

[ChorizoPicozo]

Supply constraints.

"Supply constraints"

 

[reksveks]

Did we get new Game Pass subscribers number?

It has been almost 450 days since we last got any update from Microsoft.

not yet but they may mention it in the call, i think we will get PC YoY growth numbers and that's it.

 

[Luigi Mario]

Not as bad as I was anticipating. Hardware sales being down is expected with Series X consoles still being so hard to find.

This hasn't been true for months now, especially in Europe and the US.

 

[DeepEnigma]

Supply constraints.

When the demand isn't there you constrain the supply, yes.

 

[feynoob]

Supply constraints.

What is holding them down?

 

[GHG]

I do wonder why content and services grew 3% despite hardware being 30% comparatively to the previous Q3 2022 that was the highest (hardware wise) for Xbox.

Game Pass and game sales I guess.

I'm expecting to hear that yet again, PC will be responsible for the vast majority of any GP growth that there was.

 

[ChorizoPicozo]

What is holding them down?

sony. what else.

 

[Darsxx82]

it is, the disconnect to software and content is weird.

We are talking about hardware revenue, which is not indicative of units sold.

Sure, unit sales are lower, but that 30% figure may also be a consequence of XSS selling more than XSX.

 

[wolffy66]

Of all this I always wonder, how in the world does LinkedIn keep making money?

 

[sloppyjoe_gamer]

Serious question......aside from Starfield what other big exclusive do they have coming?

 

[ChorizoPicozo]

Serious question......aside from Starfield what other big exclusive do they have coming?

a lot.

 

[Thirty7ven]

supply constraints lmao

 

[TheGodfather07]

30% down in 3rd year is awful. No way to spin this. Even more worrying is how do they improve this? Starfield alone will not change anything. What do Microsoft do if console sales keep declining?

 

[feynoob]

Of all this I always wonder, how in the world does LinkedIn keep making money?

Most of LinkedIn's revenue is generated from three of its major services: Talent Solutions, Marketing Solutions, and Premium Subscriptions.

 

[DaGwaphics]

We are talking about hardware revenue, which is not indicative of units sold.

Sure, unit sales are lower, but that 30% figure may also be a consequence of XSS selling more than XSX.

True, could be more discounts on the XSS as well. Although the XSX units they have been selling have been bundles with a game tacked on.

 

[Skifi28]

Quick, buy two more publishers to compensate!

 

[Baki]

Terrible Xbox numbers. The only department for MS with a revenue decline.

 

[Musilla]

 

[ChuckeRearmed]

What do Microsoft do if console sales keep declining?

Nothing? They will improve the supply eventually and content and services increased no? And that's without ABK. With ABK it is gonna be fascinating.

 

[mejin]

and that's why they are desperately to close the deal with Activision.

 

[Unknown Soldier]

Don't worry, MS will just acquire EA, Take 2, and Ubisoft and deny all their content to PlayStation to turn this ship right around