Xbox revenue drops 10 percent as Microsoft’s cloud business surges
Microsoft’s Q4 earnings show Xbox content and services revenue decreased by 10%, while its cloud division soared 27%.
Microsoft released its fourth-quarter earnings report on Wednesday, revealing a mixed bag for its gaming and cloud divisions. Xbox content and services revenue, which includes Game Pass subscriptions, fell 10% compared to the same period last year. Xbox hardware sales also declined, dropping 14%.
The news comes just weeks after Xbox head Asha Sharma announced a “reset” plan for the division, which includes sweeping layoffs and the spinoff of four game studios, such as Compulsion Games (developer of South of Midnight) and Double Fine Productions (creator of Psychonauts). Sharma has also made other notable changes, including lowering Game Pass prices, testing free ad-supported cloud gaming, and making Gears of War: E-Day and Clockwork Revolution Xbox exclusives.
Meanwhile, Microsoft’s cloud business continued its strong performance, with revenue surging 27% to $59.3 billion. Its productivity business, which includes Microsoft 365 and LinkedIn, grew 14% to $37.8 billion.
Not all of Microsoft’s businesses fared well. The Windows OEM and devices segment decreased 7%, driven by lower PC market demand.
