Xbox Series X/S sales take a hit, but Game Pass continues to drive growth

Microsoft has published its latest quarterly earnings report, giving us a new look at how Xbox is doing. While Xbox Series X/S consoles have begun selling out in some countries due to Starfield's upcoming launch, Xbox console sales have dropped by 13 percent, but overall gaming revenue has continued to increase.

During the earnings call, Microsoft CEO, Satya Nadella, confirmed that gaming revenue has increased by 1% over the last quarter, but overall engagement within the Xbox ecosystem has seen a more substantial bump. Microsoft says Game Pass usage has increased by 22 percent year-on-year.

Game Pass growth has been driven by the addition of new platforms. The subscription service is becoming more popular amongst PC gamers for instance, and Game Pass Ultimate offers those with just a web browser to stream a vast library of titles.

Microsoft should see a bump in gaming revenues later this year following the release of Starfield in September. Microsoft is also looking to add Activision Blizzard King to its roster of subsidiaries. Call of Duty brings in over $1 billion each year, and King's mobile games are also highly successful. Adding those to the Xbox arsenal will lead to another boost and more sustainable income between major tentpole game releases.

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KitGuru Says: Given that Redfall didn't gain any traction in May, I'm not surprised to hear that Xbox console sales dipped over the last quarter. However, with the company now focusing more on supporting a wide range of devices, like PC and mobile, console sales aren't quite as important to Xbox's bottom line as they used to be. 

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