Microsoft · The Verge
Microsoft logs sinking Xbox revenue as its cloud business climbs
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Xbox hardware revenue took a 33 percent hit, even as the company raked in $82.9 billion.
Key facts
- Our AI business surpassed an annual revenue run rate of $37 billion, up 123% year-over-year.” Revenue earned by Azure and other cloud services went up 40 percent
- Microsoft 365 Copilot saw growth as well, with paid seats jumping from 15 million in the previous quarter to 20 million
- The company says Microsoft 365 consumer cloud revenue increased 33 percent during this quarter, while its commercial segment increased 19 percent
- Xbox hardware revenue took a 33 percent hit, even as the company raked in $82.9 billion
Summary
Microsoft’s Xbox hardware revenue continues to tumble, with the company revealing a 33 percent decline as part of its earnings report released on Wednesday. Along with declining Xbox hardware revenue, Microsoft reported a 5 percent drop in Xbox content and services as well. Microsoft CEO Satya Nadella reflected on these changes during an earnings call, saying it’s part of efforts to “win back fans” across its brands, including Xbox. Nadella also cited changes to Windows, which have “brought performance improvements for lower memory devices, streamlined the Windows Update experience, and brought back focus to core features and fundamentals.” The company recently started letting customers pause Windows Updates indefinitely, and also got rid of “unnecessary” Copilot buttons across Windows 11 apps.