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<p><img src="https://www.gameinformer.com/sites/default/files/styles/body_default/public/2023/01/25/1c5e59c3/xbox_header.jpg" width="800" height="450" alt="Microsoft revenue Q2 2023 Xbox Series X/S consoles financials game pass" typeof="foaf:Image" class="image-style-body-default" /></p>
<p>Xbox gaming revenue is mostly down across all fronts, but its Game Pass subscriber base still saw growth. </p>
<p>Microsoft released its <a href="https://www.microsoft.com/en-us/investor/earnings/fy-2023-q2/press-release-webcast" target="_blank">second quarter financial results for the 2023 fiscal year</a> yesterday, and it revealed that Xbox gaming revenue declined 13% overall. Xbox content and services, such as first-party software and monetization in third-party games, declined 12%, but Microsoft notes that this decline is up against a "strong prior year comparable." Given that Xbox's 2022 was lackluster compared to the prior year, this isn't surprising.</p>
<p>However, the financial results <a href="https://www.microsoft.com/en-us/Investor/earnings/FY-2023-Q2/document/viewdocument/SlidesFY23Q2.pptx" target="_blank">state</a> that this 12% decline is "partially offset by growth in Xbox Game Pass subscriptions." Xbox hardware revenue has also declined 13%. During an earnings call, Microsoft CEO Satya Nadella revealed that Xbox's monthly active users surpassed 120 million during this quarter in question, as reported by <a href="https://www.ign.com/articles/xbox-gaming-and-hardware-revenue-down-slightly-amid-lack-of-big-releases" target="_blank"><em>IGN</em></a>. Nadella added that Microsoft is expecting another year-over-year decline next quarter due to a similar situation as this quarter. </p>
<p>Video game sales analyst <a href="https://twitter.com/BenjiSales" target="_blank">Benji-Sales (on Twitter)</a> offered some commentary on these financial results, stating that he's less worried about Xbox's gaming revenue and software performance but that the decline in hardware is alarming. </p>
<p>"I'm less worried about overall Gaming Revenue and Software performance. They are down but that's expected considering how weak of a year Xbox had for 1st party content. The more alarming thing here is Hardware. This early in a generation we really shouldn't be seeing declines." </p>
<blockquote class="tw-align-center twitter-tweet">
<p dir="ltr" lang="en">I'm less worried about overall Gaming Revenue and Software performance. They are down but that's expected considering how weak of a year Xbox had for 1st party content<br />
<br />
The more alarming thing here is Hardware. This early in a generation we really shouldn't be seeing declines</p>
— Benji-Sales (@BenjiSales) <a href="https://twitter.com/BenjiSales/status/1617997025186025472?ref_src=twsrc%5Etfw">January 24, 2023</a></blockquote>
<p>As Benji-Sales and many others have noted, though, these past few quarters have been lackluster for Xbox, but 2023 is shaping up to be the Xbox Series X/S' biggest year yet, with games like <a href="https://www.gameinformer.com/xbox-games-showcase/2022/06/12/redfall-gameplay-trailer-makes-a-thrilling-and-bloody-impression" target="_blank">Redfall</a>, <a href="https://www.gameinformer.com/2023/01/03/starfield-support-page-reconfirms-it-will-release-in-the-first-half-of-this-year" target="_blank">Starfield</a>, and <a href="https://www.gameinformer.com/xbox-games-showcase/2022/06/12/forza-motorsport-revealed-releasing-spring-2023" target="_blank">Forza Motorsport expected to release</a>. </p>
<p>We should be learning more about some of these games in <a href="https://www.gameinformer.com/2023/01/11/xbox-and-bethesda-developer-direct-coming-later-this-month" target="_blank">today's Xbox Developer Direct</a> and then Starfield in a Starfield-specific showcase Xbox is planning. </p>
<p><em>Do these financial results surprise you? Let us know in the comments below!</em></p>