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[adamsapple]

Xbox FY24 Q2 gaming revenue up 49% year-over-year, driven by impact of Activision Blizzard acquisition

Microsoft reported massive growth in Xbox revenue for the quarter, largely due to the acquisition of Activision Blizzard.

www.windowscentral.com

What you need to know​

• Microsoft shared its financial results for FY24 Q2, the quarter ending on Dec. 31, 2023.
• Gaming revenue is up 49% year-over-year.
• Xbox content and services revenue is up 61% year-over-year.
• Xbox hardware revenue is up 3% year-over-year.

 

[James Sawyer Ford]

Inorganic Growth to offset Organic declines

 

[adamsapple]

Xbox content and services revenue, which includes Xbox Game Pass, is up by a massive 61 percent. That’s largely because of the Activision Blizzard revenues, so it’s difficult to understand immediately how Xbox did without this giant addition.

Microsoft says the net impact from the Activision Blizzard acquisition is just over $2 billion in revenue, but the cost of integration, transaction costs, and other costs of revenue all total $930 million. With other operating expenses ($1.59 billion) it works out to an operating loss of $440 million.

 

[ShaiKhulud1989]

HW YoY is pathetic considering the deep discounts. Funny thing that Activision cost MS one Bethesda more in the end and they still hide net profit behind the revenue.

Without ABK, numbers are quite telling. Dedicated HW days are numbered and releases on other platforms are just a matter of time.

 

[Mownoc]

Xbox Revenue (Quarter Ending Dec 31st 2022) - $4.76 Billion
Activision Revenue (Quarter Ending Dec 31st 2022) - $2.33 Billion
Combined Revenue (Quarter Ending Dec 31st 2022) - $7.09 Billion

So revenue was essentially flat compared to last year if you are combining MS+ACTI 2022 Vs 2023. There was not growth.

 

[GHG]

Xbox Revenue (Quarter Ending Dec 31st 2022) - $4.76 Billion
Activision Revenue (Quarter Ending Dec 31st 2022) - $2.33 Billion
Combined Revenue (Quarter Ending Dec 31st 2022) - $7.09 Billion

So revenue was essentially flat compared to last year if you are combining MS+ACTI 2022 Vs 2023. There was not growth.

 

[ChorizoPicozo]

congrats to phil for this monumental career moment. the Xbox future is bright.

 

[HeisenbergFX4]

 

[Kacho]

Xbox hardware revenue is up 3% year-over-year.

Sweet baby jesus. They can't hide this lack of growth.

 

[adamsapple]

Went from being (potentially) one of the lowest to the highest.

I expect Phil to get an award or two for this.

 

[Diddy X]

In to read Neogaf experts explain how Xbox is a failure.

 

[kazuyamishima]

Series X units are higher than Series S from October - December 2023 and Series S units were higher than Series X from October - December 2022.

So in terms of units, they might be flat or even lower in 2023 compared to 2022.

That could be terrible.

 

[ShaiKhulud1989]

In to read Neogaf experts explain how Xbox is a failure.

If we exclude the 75b deal it’s flat, Jim. Numbers are not that hard to read.

 

[Ass of Can Whooping]

Pay to win

 

[rexux-Corocotta]

Xbox Revenue (Quarter Ending Dec 31st 2022) - $4.76 Billion
Activision Revenue (Quarter Ending Dec 31st 2022) - $2.33 Billion
Combined Revenue (Quarter Ending Dec 31st 2022) - $7.09 Billion

So revenue was essentially flat compared to last year if you are combining MS+ACTI 2022 Vs 2023. There was not growth.

On October 13, 2023, we completed our acquisition of Activision Blizzard for a total purchase price of $75.4 billion, consisting primarily of cash. The financial results of Activision Blizzard have been included in our consolidated financial statements since the date of the acquisition. Activision Blizzard is reported as part of our More Personal Computing segment. Refer to Note 7 – Business Combinations of the Notes to the Financial Statements (Part I, Item 1 of this Form 10-Q) for further discussion.

 

[N0S]

 

[Bojji]

In to read Neogaf experts explain how Xbox is a failure.

They are dead last. Anything else?

 

[HeisenbergFX4]

Went from being (potentially) one of the lowest to the highest.

I expect Phil to get an award or two for this.

 

[LiquidMetal14]

Phillip Bartholemule Spender does it again!

 

[NonPhixion]

one explanation might be that gaming, without the boost from the Activision deal, would be one of the slower-growing parts of Microsoft

No waay, really??!

 

[Luminoth-4545]

The larger Series S share last year was offset by the big discounts in December this year so i think price per hardware purchase is very similar to last year. This means we should expect unit sales to also be around 3% higher, based on this I'm estimating 3.6 million for the Oct to Dec quarter for Xbox Series and just below 29 million lifetime to date.

EDIT: the consensus on InstallBase is despite the revenue increase the unit sales are likely to be marginally down yoy so i'm now estimating 3.4 million.

If you are wondering the Nintendo earning's report is on February 6th and the Playstation earning's report is on February 14th. From the data we have from Circana / GSD / Famitsu i am predicting 6.4 million for Switch and 9.6 million for PS5.

 

[JohnnyFootball]

I’ll bring up the same thing I always bring up when Microsoft shares their revenue:

How much is actual profit?

$8 billion in gaming revenue don’t mean Jack if there is $9 billion in expenses.

Still no me mention of Gamepass subscribers.

 

[gokurho]

Xbox FY24 Q2 gaming revenue up 49% year-over-year, driven by impact of Activision Blizzard acquisition

Microsoft reported massive growth in Xbox revenue for the quarter, largely due to the acquisition of Activision Blizzard.

www.windowscentral.com

What you need to know​

• Microsoft shared its financial results for FY24 Q2, the quarter ending on Dec. 31, 2023.
• Gaming revenue is up 49% year-over-year.
• Xbox content and services revenue is up 61% year-over-year.
• Xbox hardware revenue is up 3% year-over-year.

The engagement of XBOX is organically continuing to grow

 

[Kssio_Aug]

But the experts past week said otherwise! I'm shocked.

 

[Ass of Can Whooping]

But the experts past week said otherwise! I'm shocked.

Said what?

 

[Edmund]

Pay to win

Pay to still get their ass whooped by Sony and Nintendo.

 

[ByWatterson]

I grew 49% taller by standing on my chair.

 

[Topher]

The engagement of XBOX is organically continuing to grow

 

[Banjo64]

The harder they try, the funnier it is.

 

[Elios83]

But the experts past week said otherwise! I'm shocked.

Said what?
That Activision wouldn't boost their revenues?
It also created considerable operating losses for the quarter. Combined revenues of the two companies is pretty much the same.

The rest is always the same, no clear Gamepass numbers or targets, hardware is super bad, 3% revenues up with most of the Xbox consoles sold this year being Series X compared to Series S last year means that units could be even down yoy depending on how much the December firesales mitigated this effect.

 

[James Sawyer Ford]

I’ll bring up the same thing I always bring up when Microsoft shares their revenue:

How much is actual profit?

$8 billion in gaming revenue don’t mean Jack if there is $9 billion in expenses.

Still no me mention of Gamepass subscribers.

How much do 18000 employees cost each year?

At least 3B in base payroll expenses, ignoring the multiplier effects

 

[Darsxx82]

Series X units are higher than Series S from October - December 2023 and Series S units were higher than Series X from October - December 2022.

So in terms of units, they might be flat or even lower in 2023 compared to 2022.

That could be terrible.

You forgot includes the variant that this year XSS and especially XSX were heavily discounted. That is to say, that despite the level of discounts, income has been maintained (even increased) is reason to believe that the number of units could be greater , not lower. Same case as seen in the CIRCANA data where it later resulted in a greater number of units sold.


That said, these are certainly much better results than many expected. Even better than MS itself, which predicted a reduction in his memo Of Q3.

 

[ChorizoPicozo]

 

[twilo99]

Neogaf experts

They are mostly cheap fortune tellers.

 

[GHG]

That said, these are certainly much better results than many expected. Even better than MS itself, which predicted a reduction in his memo Of Q3.

If its better than expected then why are they having to make substantial cuts to staff?

Quite the quandary.

 

[HeisenbergFX4]

 

[SlimySnake]

This is like claiming you are a ladies man after spending $69 billion on hookers.

 

[James Sawyer Ford]

This is like claiming you are ladies man after spending $69 billion on hookers.

 

[Ar¢tos]

How is hardware revenue 3% more if they sold less?
More costs instead of profit?

 

[Topher]

They are mostly cheap fortune tellers.

I mean......"they" includes you.

 

[Adam_802]

Not the low numbers some were seemingly hoping for lol

 

[Bry0]

Thank you Phil, this is incredible to see. Congrats to Xbox on this unprecedented yearly growth looking forward to 2024, more platforms playing Xbox games!

#BO GANG

 

[Topher]

Not the low numbers some were seemingly hoping for lol

I must have missed all these posts where folks were suggesting a $69 billion acquisition would have a negative impact on revenue.

 

[ShaiKhulud1989]

Not the low numbers some were seemingly hoping for lol

Indulge me and explain why HW numbers and SW numbers are good if we exclude the quite mechanical ATVI revenue that in the end cost MS 6 billion more.

 

[TheThreadsThatBindUs]

All you haterz betta STFU!

MS is the ONLY console platform on their way to serving 1 BILLION GAMERS!!!!

Spoiler

Just maybe not on Xbox... or console at all.

 

[GHG]

This is like claiming you are a ladies man after spending $69 billion on hookers.

 

[kazuyamishima]

You forgot includes the variant that this year XSS and especially XSX were heavily discounted. That is to say, that despite the level of discounts, income has been maintained (even increased) is reason to believe that the number of units could be greater , not lower. Same case as seen in the CIRCANA data where it later resulted in a greater number of units sold.


That said, these are certainly much better results than many expected. Even better than MS itself, which predicted a reduction in his memo Of Q3.

I mean, we have numbers from US, UK and Europe from October to December 2023 for Xbox Series Consoles and:

US is down 6%
Europe is down 52% in October, 26% down in November and 19% down in December
UK is flat.

Unless they did extremely good in the other regions, I'll say shipments are down compared to 2022.

 

[TheThreadsThatBindUs]

I mean, we have numbers from US, UK and Europe from October to December 2023 for Xbox Series Consoles and:

US is down 6%
Europe is down 52% in October, 26% down in November and 19% down in December
UK is flat.

Unless they did extremely good in the other regions, I'll say shipments are down compared to 2022.

I'm guessing the hw revenue increase was from peripherals then?

 

[Thick Thighs Save Lives]

 

[twilo99]

I mean......"they" includes you.

I'm indeed part of the crew, but the rest simply won't admit it..