Xbox Game Pass users grow while Xbox console sales drop

Microsoft has announced solid growth for Xbox services, including Xbox Game Pass.
xbox game pass rival game sales q3 2023 finanicla results

Microsoft has announced its financial results for the quarter ending on 31 March 2023, a period described as one of the company’s all-time best third quarters. This appears to be driven by growth in the Xbox content and services segment, which was up 3% year-on-year due to the enduring popularity of the Xbox Game Pass subscription service.

‘We set third quarter records for monthly active users and monthly active devices,’ Microsoft CEO Satya Nadella said in a recent company earnings call, per VGC. ‘Across our content and services business, we’re delivering on our commitment to offer gamers more ways to experience the games they love, while revenue from subscription reached nearly [US] $1 billion this quarter.’

‘This quarter, we also brought PC Game Pass to 40 new countries, nearly doubling the number of markets where it’s available … We have now surpassed 500 million lifetime unique users across our first-party titles, and have never been more excited about our pipeline of games, including the fourth quarter launches of Minecraft Legends and Redfall.’

Read: Redfall preview – All blood suckers go to hell

Despite this enthusiasm, growth was reportedly not sustained in other avenues, including Xbox hardware revenue – which was down 30% year-on-year. This drop was attributed to having a significant year prior, which was boosted by increased console supply, and the removal of coronavirus-era bottlenecks in the manufacturing supply chain.

Overall gaming revenue also declined in Q3 2023, but only by 4% year-on-year – to US $3.59 billion. As Nadella mentions, the next financial quarter for Microsoft will include the blockbuster launches of Minecraft Legends and Redfall, so it’s likely we’ll see this downturn swiftly reverse in the company’s next report.

Another ongoing factor that may impact future Microsoft financial reports is its proposed acquisition of Activision Blizzard, and the eventual finalisation of this deal. So far, it remains the subject of scrutiny by global anti-competitive organisational bodies – but should the deal clear in time, it may play into the company’s next financial year.

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Leah J. Williams is a gaming and entertainment journalist who's spent years writing about the games industry, her love for The Sims 2 on Nintendo DS and every piece of weird history she knows. You can find her tweeting @legenette most days.