Microsoft has shared its fiscal year 2023 second quarter earnings conference call transcript on its website. According to the statements, Xbox has broken a record with 120 million active users. Eventhough user numbers broke a record, gaming revenue declined by 13% year-over-year.
Microsoft had expected a drop in revenue when 2022 Q4 earnings were announced. Microsoft said the decline would be due to lower engagement hours and monetization in third-party and first-party content for Xbox. The lack of strong new releases also affected the revenue.
In the 2023 Q1 report, Xbox revenue had a 1% increase, but content and services revenue was down by 3% as had been forecasted.
Microsoft CEO Satya Nadella said “We saw new highs for Game Pass subscriptions, game streaming hours, and monthly active devices. And monthly active users surpassed a record 120 million during the quarter.” and continued “This quarter, we partnered with Riot Games to make the company’s PC and mobile games, along with premium content, available to subscribers.”
Microsoft expects an increase in Xbox Game Pass subscriptions and daily active users in upcoming quarters. Due to a strong prior year, next quarter’s revenue is still expected to drop year-over-year.