Xbox Series X / S sales fell 30% and reached the lowest revenue since its launch

Xbox console sales fell 30% year-over-year, hitting the lowest revenue mark since the Xbox Series X/S consoles launched in November 2020.

Microsoft just released its fiscal 2023 third-quarter earnings report, and the results aren’t all that great for Xbox hardware. According to data provided by Microsoft, total Xbox console sales revenue is down a staggering 30% from last year. Our records indicate that Xbox consoles generated about $508 million during the third quarter period (January-March 2023). This is the lowest point since the launch of the Xbox Series line of consoles during Microsoft’s Q2 FY21 period.

In its Q10 SEC filing, Microsoft notes that the revenue decline was due to “lower volume of consoles sold,” but why have hardware sales dropped so much? It’s not necessarily because the system is unpopular compared to the PlayStation 5, but rather because of longstanding supply constraint issues. Microsoft is apparently producing fewer consoles than before, possibly due to a shortage of key components.

Game revenue decreased $133 million or 4% due to a decline in Xbox hardware. Xbox hardware revenue declined 30% compared to a strong prior year, driven by lower volume of consoles sold. Xbox content and services revenue increased 3% driven by growth in Xbox Game Pass“, Microsoft writes in its 10Q presentation.

Xbox hardware revenue was down 30% (down 28% CC) compared to the prior year which benefited from higher console supplythe company’s third-quarter earnings slides read.

Overall, the Xbox business seems to be pretty healthy. While hardware sales are down, content and services revenue rose 3% to $3.105 billion, driven in part by Xbox Game Pass subscriptions.