Xbox gaming revenue up despite dip in console sales thanks to Game Pass

Microsoft released its Q4 and full-year financial report for fiscal year 2023 overnight, noting a decline in hardware and flat gaming sales.

For the fourth quarter, revenue for the More Personal Computing segment, which houses Xbox, declined by 4% year-over-year (yoy) to $13.9 billion.

Gaming revenue for the segment was lower than expected, coming in rather flat with a 1% yoy increase. Microsoft attributed this to a weak performance in first and third-party content.

However, Xbox content and services revenue grew 5% yoy due to Game Pass and sales of third-party content.

Player hours were up 22% for Game Pass, and monthly active users for Xbox hit a record number during the quarter.

Sales of Xbox consoles were down during Q4, with revenue declining by 13% yoy.

As a whole, Microsoft reported total revenue of $56.2 billion, up 8% yoy. For the full year, Microsoft reported $211.9 billion in revenue, up 11% yoy.