A lack of new releases hit Microsoft's gaming business in the three months ended in December…
The company said on Tuesday that Xbox content and services revenue for the quarter was down 12%, while Xbox hardware revenue fell 13% compared to the same period a year earlier.
Microsoft said content and services revenue was down “on a strong prior year comparable, with declines in first-party content and lower monetization in third-party content, partially offset by growth in Xbox Game Pass subscriptions”.
The declines were in line with the company’s previous guidance. In October, Microsoft’s chief financial officer Amy Hood said it was expecting gaming revenue to decline in the low-to-mid teens.
Sounds like they saw this coming and weren't surprised by it.