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Xbox FYQ1 (July~September) Results: Gaming division grew 16%

Tutomos

Member
I don't think it was ever going to do that in a short term, Microsoft need to get another minecraft in terms of revenue. Microsoft is probably going to be the clear number 2 platform holder in terms of revenue. I don't know what a realistic time frame is or what Microsoft is expecting.


I think they should but the real question is buy what percentage?
I don't think Minecraft has anything to do with Microsoft's strategy on high-end games. Grand/Fate was making Sony $1bn a year and it wasn't part of Playstation.

Microsoft lost the mobile war to Apple and Google and is now trying to come at the mobile with the cloud angle, but how many people are going to play high-end games on their phones? Microsoft obviously isn't hurting for money but watching Apple taking cuts from game dev and doing basically nothing while pulling billions in profit must not sit well with them.
 
Xbox FY22 Q1's revenue is about $3.6bn, in comparison, last year Playstation's revenue in the same period was $4.77bn. I believe Sony's earnings report for this year comes out tomorrow, and it's pretty safe to assume Playstation will beat last year's revenue.

We can also guess how well Game Pass is doing because at the end of the day everything gets converted to revenue. It's obviously not enough to beat Playstation.
Actually 4.9 Billion
ZAo9SE5.jpg
 

Godot25

Banned
So they really stopped reporting Gamepass numbers?
Also only revenues are discussed but no profits for the gaming business?
Hardware sales are always hidden behind percentages and only if those are good.
It would be nice if Microsoft tried to be trasparent with this stuff.
For who? GAF member so they can have fuel for their console wars?

Xbox is growing and that's obvious and most important thing for shareholders
 

DaGwaphics

Member
This is true but it still pushes back against the idea that people would prefer to just not have a console vs picking up the XSS for a low price. The XSS' SOC has a much higher yield and is easier to build than the XSX. If MS hadn't made the design decision to make two systems with different specs they'd be even further behind in hardware sales and market penetration. There is really has been no downside to the presence of the XSS on the market. This has been true of the PC market forever where differences in hardware hasn't had major negative impacts on gaming. It provides more consumer choice and everyone should be in favor of that.

Completely agree. Options are always a great thing.
 

Excess

Member
Love all the armchair financial consultants in this thread trying to spin growth as a negative again.

This is one of those topics where NEETs discuss the health of a company's financial earnings in order to score points on the proverbial scoreboard, so as to not make themselves feel better or worse about the investments they've made in products they've purchased, right? 😁
 

elliot5

Member
So just the last quarter or so the numbers have flipped. I'm wondering if Microsoft was holding back stock for the holiday season.
They're all Halo limited edition consoles /s

I suspect series S will outsell greatly in q2 bc of Forza and Halo and supply constraints, even if they are stockpiling more x and s for later
 

StreetsofBeige

Gold Member
Even better. Quarterly net income for the company was $17 billion (or $20 billion) as explained by GAAP/Non-GAAP. I didn't read the explanation, but it's $17 billion minimum.

I think another acquisition or two is in the cards.
Toronto Blue Jays Baseball GIF by MLB
 

Elios83

Member
For who? GAF member so they can have fuel for their console wars?

Xbox is growing and that's obvious and most important thing for shareholders

Just imagine if the only thing they reported for other divisions were revenues.
Shareholders should be more than interested in knowing how and if their big investements in Gamepass are paying off and they gladly announced numbers until last year so they thought those numbers were interesting up until a certain point. Why?
Investors should be interested in knowing how hardware sales are actually going at the beginning of a new gen and to get an idea of how shortages are impacting the business.
Same for actual profits, same for actual software sales, the split between digital and physical.
Other companies are providing these datas both when they're good and when they're bad.
This is just plain obfuscation and it shouldn't be justified.
 
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Kagey K

Banned
Just imagine if the only thing they reported for other divisions were revenues.
Shareholders should be more than interested in knowing how and if their big investements in Gamepass are paying off and they gladly announced numbers until last year so they thought those numbers were interesting up until a certain point. Why?
Investors should be interested in knowing how hardware sales are actually going at the beginning of a new gen and to get an idea of how shortages are impacting the business.
Same for actual profits, same for actual software sales, the split between digital and physical.
Other companies are providing these datas both when they're good and when they're bad.
This is just plain obfuscation and it shouldn't be justified.
Investors don’t give a shit about the Xbox division in any way shape or form.

It is a minor blip. They are busy looking at the actual stuff that makes them money.

It’s like counting your pennies, while all the big bills sit off to the side.
 
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Three

Gold Member
So just the last quarter or so the numbers have flipped. I'm wondering if Microsoft was holding back stock for the holiday season.
It's more likely the fact that Series X is bound to sell more at launch. As time goes on though the early adopters would have a Series X and Series S will sell more than X. Which IMO is a travesty that was obvious from launch.
 

Abriael_GN

RSI Employee of the Year
Just to add to the conversation, Microsoft expects 6-9% growth year-on-year for overall gaming (hardware + software) during the Holiday quarter (October-December) and around 15% growth for software & services.

Of course continuing supply issues for the consoles.

They also said Q1 was a record (for Q1s) in engagement and monetization.
 
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IntentionalPun

Ask me about my wife's perfect butthole
Content and services barely growing YOY.. doesn't seem like a great thing?

Not doom and glooming.. but most of this seems to be increased hardware revenue.

Which considering the lack of content and services increase... it's Xbox owners replacing old Xbox's, and not buying more software/GamePass.

Was this quarter last year full of big 3rd party releases? Could be also why I guess.

edit: Abriael_GN Abriael_GN has a good point that last year's Q1 was COVID crazy time.
 
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Elios83

Member
Investors don’t give a shit about the Xbox division in any way shape or form.

It is a minor blip. They are busy looking at the actual stuff that makes them money.

It’s like counting your pennies, while all the big bills sit off to the side.

So when Nadella and Spencer talk about how gaming and Xbox is now central to Microsoft and they are investing billions to make it so it's a lie or it's just for PR? I don't think so, the 8 billions invested in Bethesda are pretty much real, just like the investements in GP.
Then just in the financials we should justify a total lack of infos with "Xbox still is an irrelevant business within MS so a quick revenues mention is more than enough".
It's clear that this is not the real story especially when datas are then shared when they're good and they can paint a good picture so there's no coherence.
 
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Godot25

Banned
If
Just imagine if the only thing they reported for other divisions were revenues.
Shareholders should be more than interested in knowing how and if their big investements in Gamepass are paying off and they gladly announced numbers until last year so they thought those numbers were interesting up until a certain point. Why?
Investors should be interested in knowing how hardware sales are actually going at the beginning of a new gen and to get an idea of how shortages are impacting the business.
Same for actual profits, same for actual software sales, the split between digital and physical.
Other companies are providing these datas both when they're good and when they're bad.
This is just plain obfuscation and it shouldn't be justified.
If investors are interested they can ask during conference call...That's why they are doing conference calls.

They just don't care about particular numbers, because Xbox division is still small inside Microsoft. So they see a growth, they don't care how Microsoft got it. When growth stops, that's when they will start to ask questions.

That for example won't work for Sony, because Playstation is crucial for their business.

So again. Only reason why GAF wants numbers is to fuel console wars. Nothing more, nothing less
 
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Elios83

Member
If
If investors are interested they can ask during conference call...That's why they are doing conference calls.

They just don't care about particular numbers, because Xbox division is still small inside Microsoft. So they see a growth, they don't care how Microsoft got it. When growth stops, that's when they will start to ask questions.

That for example won't work for Sony, because Playstation is crucial for their business.

So again. Only reason why GAF wants numbers is to fuel console wars. Nothing more, nothing less

Investors cannot see growth if you're only giving a revenues figure.
No person with an actual interest in financials would only look at revenues to get an idea about how a business is going.

People on GAF want to know how they're actually doing in first place, console war is just an eventual side consequence.
Unfortunately we'll have to accept that Microsoft won't share anything and that is now including Gamepass numbers as well.
 

Abriael_GN

RSI Employee of the Year
So when Nadella and Spencer talk about how gaming and Xbox is now central to Microsoft and they are investing billions to make it so it's a lie or it's just for PR? I don't think so, the 8 billions invested in Bethesda are pretty much real, just like the investements in GP.
Then just in the financials we should justify a total lack of infos with "Xbox still is an irrelevant business within MS so a quick revenues mention is more than enough".
It's clear that this is not the real story especially when datas are then shared when they're good and they can paint a good picture so there's no coherence.

Speaking of investments, let's talk about a less visible but still emblematic case with which I happen to be very familiar, Microsoft Flight Simulator.

Microsoft is pretty literally buying content that is then being given for no additional cost to users. They're releasing the GOTY edition with 5 new aircraft and 8 airports (and a bunch of other goodies), 2 of which have been literally purchased from one of the most praised third-party developers in the business, which was previously going to sell them for about $20 each. And now whoever purchased MSFS gets the whole bundle for free.

every couple of months they keep releasing world updates which means purchasing more airports from developers and more terrain/city data from survey companies, and all of that goes to the users at no additional cost.

On top of that, they're also purchasing aircraft projects from other developers, which usually would be sold at about $35-50 like the recently announced Antonov An-2. They're gonna sell that as DLC, but for $15.

This kind of spamming money pretty much across the add-on industry to then offer the content to users for free or at a much lower price is absolutely unprecedented in the flight sim industry, even when Microsoft was in it 10 years ago.

They don't do it only when it gets big headlines like Bethesda.


I also expect them to buy Asobo at some point, but who knows there.
 
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MrFunSocks

Banned
Great result for MS. Yes, we know Sony and Nintendo will post better results but that's irrelevant. Not everything is a competition.

The usual suspects on my ignore list out in full force in here with the downplaying and concern lol. A few of them should be hit with bans soon based on their posts thankfully.

Just imagine if the only thing they reported for other divisions were revenues.
Shareholders should be more than interested in knowing how and if their big investements in Gamepass are paying off and they gladly announced numbers until last year so they thought those numbers were interesting up until a certain point. Why?
Investors should be interested in knowing how hardware sales are actually going at the beginning of a new gen and to get an idea of how shortages are impacting the business.
Same for actual profits, same for actual software sales, the split between digital and physical.
Other companies are providing these datas both when they're good and when they're bad.
This is just plain obfuscation and it shouldn't be justified.
Shareholders don't even really care about the Xbox division because it's small fries. If it's growing, like it is, that's all they care about. The only people that care this much about numbers are fanboys so they can argue numbers alongside their list wars.

Pretty sure MS have only ever announced GamePass numbers like 3 times too, it was never a consistent announcement.

Shareholders care about profit and growth, literally nothing else.
 
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Darsxx82

Member
Translation for the Xbox console user:

-The great figures for MS and Xbox ensures that the effort in launching games on Gamepass will be sustained.

- Approaching 8,5 million XSeries in the market even in spite of the lack of stock are great news. They are not the PS5 figures but they are the best of any past Xbox. Although the offer does not satisfy the demand (especially regarding XSX) that is something that did not happen at this point in past Xbox consoles.
- The generation could not paint better for the Xbox user.

The new generation is super healthy for Big 3 console users and that's fantastic news for the industry.
 

Trogdor1123

Member
This is true but it still pushes back against the idea that people would prefer to just not have a console vs picking up the XSS for a low price. The XSS' SOC has a much higher yield and is easier to build than the XSX. If MS hadn't made the design decision to make two systems with different specs they'd be even further behind in hardware sales and market penetration. There is really has been no downside to the presence of the XSS on the market. This has been true of the PC market forever where differences in hardware hasn't had major negative impacts on gaming. It provides more consumer choice and everyone should be in favor of that.
I agree, the s is pretty great. My kids love it and if games look as good as Forza does it will be great for years.
 

GHG

Gold Member
The market is honestly a joke lmao

I've been sitting on so much capital for months. Don't know what to do with it

Sell puts.

It's all I've been doing for 3 months straight now and I've been making bank consistently while not having to worry about bag holding any bloated/overvalued AF stock.

I'm now 70% cash and use that as collateral to sell the puts against the stock/etfs that I want at the prices I'd be happy to take them at. Best days to do it are on red days when the market is tanking. Set up an alert to let you know when the VIX is over 20 and once that's the case go HAM. Then it's a case of just sitting back and watching the money flow in as the lemmings buy the dips.
 
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SlimySnake

Flashless at the Golden Globes
So 8.3 total in 1 year. Or 11 months. For Xbox one, they were approaching 10 million by November 12th, 2014. Exactly one year after launch.

Assuming October sales are 1 million, they would be BEHIND the xbox one sales by almost a million. I understand that there is a chip shortage, but you gotta do better than the disastrous launch that was xbox one. Especially considering almost 40% of the consoles sold are just $299.


It seems Sony had sold 10 million units by August 2014 which is on par with what they have done this year. By August they announced they shipped 10 million. Which at the time was the fastest selling console ever.

I dont know. These are not bad numbers for a pandemic and a shortage but after 7 years of building up first party, billions in acquisition, probably billions more in gamepass, you gotta do better than that.
 


Okay so LTD the split looks about what I was expecting at this point, but for Q3 recently it's seemingly almost 2:1 in favor of the S. I know Microsoft were putting a lot of Series X units into their Azure data centers so that probably accounts for a lot of that split, because even in places like Japan it seems the X has been outselling the S.

However I think people are also underestimating the demand for Series S in certain markets. We hear a lot about anecdotal accounts of Series S' seemingly on selves a lot or in stock in some locations, but that's also exactly what they are: anecdotal accounts. They don't say a lot (if anything) about a market at large, those accounts could even be specific to very particular retail chains in specific cities only.

That said tho I think the Series X is likely notably more undersupplied than the Series S...or at least it is for me xD.

Content and services barely growing YOY.. doesn't seem like a great thing?

Not doom and glooming.. but most of this seems to be increased hardware revenue.

Which considering the lack of content and services increase... it's Xbox owners replacing old Xbox's, and not buying more software/GamePass.

Was this quarter last year full of big 3rd party releases? Could be also why I guess.

edit: Abriael_GN Abriael_GN has a good point that last year's Q1 was COVID crazy time.

Yeah, services across the industry took a hit this year since lockdowns eased and some normalcy started coming back. PlayStation for example was down 10 million PSN users at one point (they've probably regained at least some of those back now, though). Netflix also lost like 20 million subscribers in NA sometime earlier this year I think.

Again, they've probably gained back at least some of those thanks to some recent hits like Squid Game, but it just goes to show no subscription service was safe from some subscriber loss this year which would affect YOY gains in general.
 

spons

Gold Member
Wow Xbox Series S is outselling the X by that much!

This is news to me.
It's the only next gen device that's actually available without having to bullshit around, so no surprise there. There are multiple stores carrying that shit 24/7. No idea how that's possible though.
 

IntentionalPun

Ask me about my wife's perfect butthole
Yeah, services across the industry took a hit this year since lockdowns eased and some normalcy started coming back. PlayStation for example was down 10 million PSN users at one point (they've probably regained at least some of those back now, though). Netflix also lost like 20 million subscribers in NA sometime earlier this year I think.

Again, they've probably gained back at least some of those thanks to some recent hits like Squid Game, but it just goes to show no subscription service was safe from some subscriber loss this year which would affect YOY gains in general.

I know some were down; but your numbers are wayyyyy off here. PSN lost 1.4 million, and Netflix less than half a million, rebounded almost back already.

Thing is, neither PSN or Netflix are some newish massively growing service... GamePass is, which is why the revenue number is odd.... they DID grow subs over that time, we know they did.. quite significantly actually, but revenue overall only went up 2%.

But I guess it's just down to COVID "usage".. whether people were subbed or not people I guess bought more games? I dunno, just seems odd to grow a service by a fairly large amount (40%) and have your content and services revenue only go up by 2%.

I think they are largely converting Xbox gamers to GamePass gamer. They need to add more people who weren't spending on Xbox before subbing, or get those people to actually spend more than before, for it to really be a big success for them.
 
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GHG

Gold Member
So 8.3 total in 1 year. Or 11 months. For Xbox one, they were approaching 10 million by November 12th, 2014. Exactly one year after launch.

Assuming October sales are 1 million, they would be BEHIND the xbox one sales by almost a million. I understand that there is a chip shortage, but you gotta do better than the disastrous launch that was xbox one. Especially considering almost 40% of the consoles sold are just $299.


It seems Sony had sold 10 million units by August 2014 which is on par with what they have done this year. By August they announced they shipped 10 million. Which at the time was the fastest selling console ever.

I dont know. These are not bad numbers for a pandemic and a shortage but after 7 years of building up first party, billions in acquisition, probably billions more in gamepass, you gotta do better than that.

I said that would be the case prior to launch.

They've come into this gen with a lot less momentum than when they were transitioning from the 360 -> Xbox One and it's also taken them the best part of a year to start getting some 1st party/AAA exclusive games out.

I don't know why anyone expected anything different.
 

IntentionalPun

Ask me about my wife's perfect butthole
I said that would be the case prior to launch.

They've come into this gen with a lot less momentum than when they were transitioning from the 360 -> Xbox One and it's also taken them the best part of a year to start getting some 1st party/AAA exclusive games out.

I don't know why anyone expected anything different.

Beyond that it's clear Sony was adamant to secure massive production scale, and they did that just before/right at the start of the chip shortage.

It's quite possible MS could have beaten Xbox One numbers even w/o exclusives w/ all the production capacity available to them that they likely wanted.

For Xbox One supply always pretty much outpaced demand. It wasn't hard after Christmas to get one, and really wasn't particularly hard before Christmas.
 
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elliot5

Member
I know some were down; but your numbers are wayyyyy off here. PSN lost 1.4 million, and Netflix less than half a million, rebounded almost back already.

Thing is, neither PSN or Netflix are some newish massively growing service... GamePass is, which is why the revenue number is odd.... they DID grow subs over that time, we know they did.. quite significantly actually, but revenue overall only went up 2%.

But I guess it's just down to COVID "usage".. whether people were subbed or not people I guess bought more games? I dunno, just seems odd to grow a service by a fairly large amount (40%) and have your content and services revenue only go up by 2%.

I think they are largely converting Xbox gamers to GamePass gamer. They need to add more people who weren't spending on Xbox before subbing, or get those people to actually spend more than before, for it to really be a big success for them.
Are you referring to the 36% missed target thing recently? That was up until end of June 2021. This is the following quarter report from July-September 2021. All that was stated is growth in GP and first party sales but offset by lack of third party sales leading to 2% growth.
 

IntentionalPun

Ask me about my wife's perfect butthole
Are you referring to the 36% missed target thing recently? That was up until end of June 2021. This is the following quarter report from July-September 2021. All that was stated is growth in GP and first party sales but offset by lack of third party sales leading to 2% growth.

Not sure really what your point is. I know that report was for end of FY2021 showing +~37%, doesn't really matter.. those users still exist on the platform, and a good chunk of that userbase growth happened after Q1 last year...and presumably there are even more users since June.. the spending only really went up by any significant amount during the Christmas blip.

s5N5k2B.png


It's just odd.. the point of the service isn't just recurring revenue; it's engagement.. MTX.. game sales, etc. They've added a significant amount of users since Q121 yet added very little revenue.

I think they are just adding people to GamePass but not really adding people to Xbox, in the past year. If they are adding new people, then some of the people that bought into GamePass who were already on Xbox are spending less money.

Yes this is all after a huge beginning of COVID revenue jump... but they've been adding people to GamePass by then, significant numbers.. continuously adding people in significant amounts, with C&S revenue being fairly flat since this same quarter a year ago.
 
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