Xbox Gaming and Hardware Revenue Drops 13% in December Quarter, Xbox Game Pass Sees Growth

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William D’Angelo
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Microsoft has released its earnings report for the second quarter of the 2023 fiscal year, which ended up December 31, 2022.

Xbox gaming revenue declined 13 percent year-on-year from $5.44 billion to $4.76 billion. 

Xbox Content & Services revenue decreased 12 percent. This was due to a “a strong prior year comparable” with a decline in first-party content and lower monetization in third-party content. This was “partially offset by growth in Xbox Game Pass subscriptions.”

Xbox hardware revenue decreased 13 percent year-on-year. This was driven by “lower price and volume of consoles sold.”

Xbox Gaming Revenue Grew Slightly in September Quarter, Xbox Game Pass Has Continued Growth

There was a new record set for Xbox with 120 million monthly active users during the quarter. There were also new highs for the number of Xbox Game Pass subscribers, number of hours gaming, and monthly active devices.

“We saw new highs for Game Pass subscriptions, game streaming hours, and monthly active devices,” said Microsoft CEO Satya Nadella during Microsoft’s earnings call. “And monthly active users surpassed a record 120 million during the quarter.”

Overall, Microsoft reported revenue up two percent year-over-year to $52.7 billion and net income down 12 percent to $16.4 billion.

The next major wave of computing is being born, as the Microsoft Cloud turns the world’s most advanced AI models into a new computing platform,” said Nadella. “We are committed to helping our customers use our platforms and tools to do more with less today and innovate for the future in the new era of AI.”


A life-long and avid gamer, William D’Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.

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