Microsoft announced its financial results for the third quarter of the fiscal year 2023, including details on the performance of its Xbox business.
The related press release and presentation showcase the quarterly results of the More Personal Computing segment of Microsoft's business, which includes the company's gaming business and Xbox. You can check out the relevant slides below.
We hear that overall gaming revenue declined 4% year-on-year. Xbox content and service revenue grew 3% year-on-year. This growth was driven by Game Pass.
On the other hand, Xbox hardware took the biggest hit with a 30% decline year-on-year due to the unfavorable comparison with the same period in the previous year, in which Xbox consoles enjoyed increased supply.
It's worth mentioning that Microsoft expected the decline in gaming revenue and that dropping revenue does not mean that the results are negative or the business is actually losing money. As a matter of fact, the previous year marked a record in gaming revenue for Microsoft in Q3, hence the decline this year.
Microsoft as a whole company saw quarterly revenue increase 7% year-on-year, while operating income grew 10%, as you can see below.
This announcement will be followed by a financial conference call for investors and analysts. CEO Satya Nadella and CFO Amy Hood are expected to provide more color about the results on top of the guidance for the current quarter (from April to June 2023). Of course, you can expect a report here on TechRaptor as soon as more information is shared.
As usual, it's worth clarifying that the data is related to the quarter between January 1, 2022, and March 31, 2022. Unlike most other corporations in this industry, Microsoft doesn't use a fiscal calendar that represents the year from April to March. Its fiscal year goes from July to June, so the January-March quarter is identified as Q3 instead of Q4.