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Xbox FYQ1 (July~September) Results: Gaming division grew 16%

SlimySnake

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I said that would be the case prior to launch.

They've come into this gen with a lot less momentum than when they were transitioning from the 360 -> Xbox One and it's also taken them the best part of a year to start getting some 1st party/AAA exclusive games out.

I don't know why anyone expected anything different.
Makes sense. Didnt think of it like that. IIRC, Xbox 360 was the market leader in NA since 2010 or so after the launched kinect. They won pretty much every month while the wii went cold.

They also had a fantastic year 1 line up that included Titanfall and Sunset overdrive. Even the launch lineup wasnt that bad with Killer instinct, Ryse, Forza, and Dead Rising filling out a pretty decent launch lineup.

But they are also selling every console they make. I am just shocked they only made around 5 million XSX. That shouldve been their lead and they shouldve prioritized that over everything else. 60-40 cut is not great at all. They need to sell to their base first and foremost and then and only then go after the masses. I get there is a chip shortage but thats all the more reason to prioritize the more expensive model because the revenue is higher and at the very least, it would make their growth look better. 3 million consoles sold at $200 fewer dollars is $600 million in lost revenue.
 
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onQ123

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Not surprised that Series S is the best selling of the 2 it's aimed at kids & casuals the biggest market & it's going to be big for the holidays.
 
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So 8.3 total in 1 year. Or 11 months. For Xbox one, they were approaching 10 million by November 12th, 2014. Exactly one year after launch.

Assuming October sales are 1 million, they would be BEHIND the xbox one sales by almost a million. I understand that there is a chip shortage, but you gotta do better than the disastrous launch that was xbox one. Especially considering almost 40% of the consoles sold are just $299.


It seems Sony had sold 10 million units by August 2014 which is on par with what they have done this year. By August they announced they shipped 10 million. Which at the time was the fastest selling console ever.

I dont know. These are not bad numbers for a pandemic and a shortage but after 7 years of building up first party, billions in acquisition, probably billions more in gamepass, you gotta do better than that.

These numbers cover up to September, or 10 months. There's no reason they won't manage another 1.6 million between September and November 20th (IIRC that's when the Series systems launched, or it might've been a week earlier than that) which would put them right on par with the 360, which is saying a lot considering everything Xbox had to build back up from after the XBO dropped the ball.

Ideally, they would want to be hitting that number sooner, or hit a higher number by that point, and those are still possible. But it's probably less probable considering Microsoft's strategy. IMO they'll fall somewhere between XBO and 360's LTD, so say 65 - 70 million LTD for a safe estimate, so if they're able to match or very slightly pass 360's 1-year system sales that's actually very good for their particular business strategy.

I know some were down; but your numbers are wayyyyy off here. PSN lost 1.4 million, and Netflix less than half a million, rebounded almost back already.

Thing is, neither PSN or Netflix are some newish massively growing service... GamePass is, which is why the revenue number is odd.... they DID grow subs over that time, we know they did.. quite significantly actually, but revenue overall only went up 2%.

But I guess it's just down to COVID "usage".. whether people were subbed or not people I guess bought more games? I dunno, just seems odd to grow a service by a fairly large amount (40%) and have your content and services revenue only go up by 2%.

I think they are largely converting Xbox gamers to GamePass gamer. They need to add more people who weren't spending on Xbox before subbing, or get those people to actually spend more than before, for it to really be a big success for them.

Well I definitely remember seeing some figures from Sony earlier in the year that showed roughly 10 million PSN users (or maybe I should really say, active users) drop. This was probably just as things were coming out of prolonged lockdowns. I'm not saying that as a definitive though, and I'd have to drum up the interest to go hunting the info I'm thinking of down to verify that.

The Netflix numbers were something I saw widely reported on though, maybe not by particularly credible sources tbf. I'd have to look that up again myself, but it's not really crazy to picture these services losing lots of subs while simultaneously gaining just as many or even more, however erratic the timings on those, to eventually have gains that either act as net gains or minimize the loss numbers as much as possible.

Microsoft have been putting out a decent number of those $1 conversion deals and likely spending more than some could've initially assumed into GamePass content securement. Maybe more people are taking advantage of those deals than I'd of originally guessed, or there's just a notable segment of folks who are dropping in/out of their subscriptions (which would factor into the aforementioned erratic 'rising and falling' of subscriptions at minute timescales that aren't necessarily worth tracking for people outside of managing said service or handling daily tracking of that stuff).
 
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dvdvideo

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So 8.3 total in 1 year. Or 11 months. For Xbox one, they were approaching 10 million by November 12th, 2014. Exactly one year after launch.

Assuming October sales are 1 million, they would be BEHIND the xbox one sales by almost a million. I understand that there is a chip shortage, but you gotta do better than the disastrous launch that was xbox one. Especially considering almost 40% of the consoles sold are just $299.


It seems Sony had sold 10 million units by August 2014 which is on par with what they have done this year. By August they announced they shipped 10 million. Which at the time was the fastest selling console ever.

I dont know. These are not bad numbers for a pandemic and a shortage but after 7 years of building up first party, billions in acquisition, probably billions more in gamepass, you gotta do better than that.

Your missing the PC side that's not counted, and all of the gamepass revenue. I don't thing ms would be unhappy at all with 50-60 million series sold and a decent pc following, as long as software is selling and gamepass subscriptions are at 30 million.
 

Jaybe

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Great lift on hardware but it’s year ago comparison was everyone holding out for the Series vs buying the soon to be last gen One. There was a Xbox one x price drop at least.

I’m surprised content and services is mostly flat given the game pass growth +38-ish(?) recently reported. Is there a software sales drought vs last year? And/Or are people mostly converting Gold or using promos or dipping in and out?

+16 is still +16, so good to see them healthy and competing.
 

DarkMage619

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Your missing the PC side that's not counted, and all of the gamepass revenue. I don't thing ms would be unhappy at all with 50-60 million series sold and a decent pc following, as long as software is selling and gamepass subscriptions are at 30 million.
Yeah MS doesn't rely solely on console sales. That and they used an allocation of XSX SOCs for their xCloud servers so that also affects how many consoles they can make. It looks like things will be quite different from the X1 generation.
 

dvdvideo

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Yeah MS doesn't rely solely on console sales. That and they used an allocation of XSX SOCs for their xCloud servers so that also affects how many consoles they can make. It looks like things will be quite different from the X1 generation.
I suppose even some non gaming PC users might be signing up.for xcloud service even without an xbox too. And this opens up even more once they launch the streaming app/stick to more devices.
 
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Lognor

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Nice results! Good after hours action too. I'm a big msft holder. Has treated me very well
 

XXL

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Lmao did they give xbox sales numbers but not Gamepass? MS are so picky lol.
No Way Reaction GIF
 

MikeM

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That Series X to S sales number is surprising but I guess that speaks more to availability of the S over the X. I hope MS gets more X units out, but perhaps they’re alotting more chips to the cloud than to console?
 

SenjutsuSage

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This guy's information is inaccurate. Xbox Content and Services grew 30%... FY21 Q1. The 2% is from FY20 Q3....

 

Stuart360

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You do know that Sony's content went down 20% YoY last quarter and network was up 9%? And in total it was a 1% growth including a 117% growth in hardware.

Aka chill the fuck out and wait for further context
They really cant help themselves. Let the mods deal with them.
 
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Artistic

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Definitely would have thought Series X>Series S as far as sales, especially since they're more in demand it seems.

Maybe more Series S are just being made?
 

DaGwaphics

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Makes sense. Didnt think of it like that. IIRC, Xbox 360 was the market leader in NA since 2010 or so after the launched kinect. They won pretty much every month while the wii went cold.

They also had a fantastic year 1 line up that included Titanfall and Sunset overdrive. Even the launch lineup wasnt that bad with Killer instinct, Ryse, Forza, and Dead Rising filling out a pretty decent launch lineup.

But they are also selling every console they make. I am just shocked they only made around 5 million XSX. That shouldve been their lead and they shouldve prioritized that over everything else. 60-40 cut is not great at all. They need to sell to their base first and foremost and then and only then go after the masses. I get there is a chip shortage but thats all the more reason to prioritize the more expensive model because the revenue is higher and at the very least, it would make their growth look better. 3 million consoles sold at $200 fewer dollars is $600 million in lost revenue.

Could be an issue that is out of their hands entirely. Many times when there is going to be a shortfall a supplier will base splits on past contracts. There is that possibility that MS just never had access to the same amount of silicone as Sony given the strong demand, and that's from the very beginning. This could even be something that figured into why the Series S was viewed as necessary to begin with. If all the silicone went to XSX they'd have a lot fewer units built and sold and the numbers would probably be more in the ballpark of the OG Xbox rather than the X1.

Hopefully there will be enough components to go around for everyone soon enough.
 
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Stuart360

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Definitely would have thought Series X>Series S as far as sales, especially since they're more in demand it seems.

Maybe more Series S are just being made?
I have still yet to see a XSX 'in the wild', literally. If they are selling every XSX they produce then there really isnt anything they can do.

I think its going to be really interesting to see what these next gen console sell when all of them are easily available in stores. I mean by the time that actually happens there should be a lot of first party Xbox games coming, or already out.

I think 8.4mil Xbox consoles sold so far is pretty damn good, under the circumstances. I mean PS5 is at what?, 12mil or something?.
 

onQ123

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Definitely would have thought Series X>Series S as far as sales, especially since they're more in demand it seems.

Maybe more Series S are just being made?

Series X was never going to out sale Series S , launch maybe but in the long run Series S is the install base builder.
 
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Artistic

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Series X was never going to out sale Series S , launch maybe but in the long run Series S is the install base builder.
I don't know man lol. I mean I've never seen a Series X in stores, but Series S...definitely.

Just as far as the resale market, I always see people requesting to buy Series Xs as well...rarely a Series S. As far as PS5, doesn't matter whether it's digital or disc.
 
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Roni

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At least in Brazil, Series S is pretty much the only budget option for current gen. Must be the same for most of the rest of the third world...
 

MrA

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Great result for MS. Yes, we know Sony and Nintendo will post better results but that's irrelevant. Not everything is a competition.

The usual suspects on my ignore list out in full force in here with the downplaying and concern lol. A few of them should be hit with bans soon based on their posts thankfully.


Shareholders don't even really care about the Xbox division because it's small fries. If it's growing, like it is, that's all they care about. The only people that care this much about numbers are fanboys so they can argue numbers alongside their list wars.

Pretty sure MS have only ever announced GamePass numbers like 3 times too, it was never a consistent announcement.

Shareholders care about profit and growth, literally nothing else.
nintendo is going to have an uphill battle showing growth just because how bananas last year was for them
Sony should have it in the bag unless ms has better profit on the hardware
 

SlimySnake

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Just for reference: Xbox division's rolling annual revenue is around $15.87 billion. Nintendo's last fiscal year revenue was $16 billion.

Source: DomsPlaying (Twitter)
I brought this up earlier this year. Nintendo was actually around $17 billion but i was very surprised by the MS number considering the fact that MS sold only a fraction of consoles Nintendo did. Their engagement numbers have always been high, but to have that kind of engagement in a covid year where nintendo switch sold something crazy like 25 million units is pretty damn impressive.

Whats more impressive is that they did that on a userbase thats pretty much half of the PS4 userbase. The ps4 was around 120 million units while the xbox one was around 50 million last year. And yet, the revenue per user during was far higher on the xbox one.
 

Kagey K

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When the discless console is outselling the big bro almost 2:1 and you think of all the chest thumping in the UK physical sales threads...

Season 9 Lol GIF by The Office
Everyone knows the physical charts are useless, even Gamesindustry biz. That's why they promised to get digital sales a couple years ago, but never really followed up with it.
 
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Kagey K

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I brought this up earlier this year. Nintendo was actually around $17 billion but i was very surprised by the MS number considering the fact that MS sold only a fraction of consoles Nintendo did. Their engagement numbers have always been high, but to have that kind of engagement in a covid year where nintendo switch sold something crazy like 25 million units is pretty damn impressive.

Whats more impressive is that they did that on a userbase thats pretty much half of the PS4 userbase. The ps4 was around 120 million units while the xbox one was around 50 million last year. And yet, the revenue per user during was far higher on the xbox one.
That's been the case forever, even Ubisoft back in the early Xbox One days said each Xbox customer was more valuable than a PS customer.


Everyone mocks Xbox, as the console to play when you have no money and subscribe to gamepass. But time and time again it just shows Xbox players are willing to spend money where they see value, and seem to be more engaged than thier other gaming counterparts.
 
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onesvenus

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From the conference call:

Forecasts for revenue growth in Q2 (Oct to Dec):

Gaming: "High single digits."
Assuming say 8%, that's $5.4B. Would be a record holiday.

Xbox Content & Services: "Mid teens."

Hardware will continue to be impacted by supply uncertainty.

Source:
 
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Kagey K

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From the conference call:

Forecasts for revenue growth in Q2 (Oct to Dec):

Gaming: "High single digits."
Assuming say 8%, that's $5.4B. Would be a record holiday.

Xbox Content & Services: "Mid teens."

Hardware will continue to be impacted by supply uncertainty.

Source:
MS put up some big numbers during Xmas NPD in the 360 era, for them to have a record Holiday would be impressive.
 

Riky

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Great results and shows that Series S was a forward thinking move, those people who insisted it was just sitting on shelves with nobody wanting one🤣
I thought it would take a year or so longer to start selling more than Series X but obviously the shortages and Series S being easier to make have had an impact.
Will be a monster this Christmas.
 

Kagey K

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Great results and shows that Series S was a forward thinking move, those people who insisted it was just sitting on shelves with nobody wanting one🤣
I thought it would take a year or so longer to start selling more than Series X but obviously the shortages and Series S being easier to make have had an impact.
Will be a monster this Christmas.
People waiting on a black Friday sale might find themselves shut out if others realize there isn't going to be one and start scooping them now.

Scalper prices about to go back up soon.
 
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Heisenberg007

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I think 8.3 million consoles (if true) are pretty good. I was expecting less. Kudos to MS for moving hardware fast, in addition to upgrading server blades. Series S outselling Series X is also very interesting. Is it because of unit availability or was Phil right in predicting that Series S will eventually outsell Series X? Would be interesting to see its progress further.

16% growth is also fine, but it's not very telling because it'd be mostly powered by hardware revenue.

2% growth is interesting because, to be honest, I was expecting more. Xbox brought quite a few games this quarter to Gamepass (Ascent, Flight Simulator, Psychonauts 2, Hades, 12 Minutes, etc.) and also released two first-party games: MSFS and Psychonauts 2.

Many on this forum -- including me -- was under the impression that this quarter will see bigger GP growth, but it didn't happen. They have relatively bigger stuff lined up for Q4, so perhaps then.
 
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Heisenberg007

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Also important: The 37% GP growth from July '20 to June '21 put max Gamepass numbers at 20 million. Now, we know that (by applying 1% of the 2% growth to GP), the numbers would be a max 20.2 million as of September 30, 2021.

Edit: This is not necessarily correct. See below.
 
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Kagey K

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I think 8.3 million consoles (if true) are pretty good. I was expecting less. Kudos to MS for moving hardware fast, in addition to upgrading server blades. Series S outselling Series X is also very interesting. Is it because of unit availability or was Phil right in predicting that Series S will eventually outsell Series X? Would be interesting to see its progress further.

16% growth is also fine, but it's not very telling because it'd be mostly powered by hardware revenue.

2% growth is interesting because, to be honest, I was expecting more. Xbox brought quite a few games this quarter to Gamepass (Ascent, Flight Simulator, Psychonauts 2, Hades, 12 Minutes, etc.) and also released two first-party games: MSFS and Psychonauts 2.

Many on this forum -- including me -- was under the impression that this quarter will see bigger GP growth, but it didn't happen. They have relatively bigger stuff lined up for Q4, so perhaps then.
That 2% growth is also covering the loss from 3rd party games as new releases were soft and Fortnite and Warzone keep declining.

Expect to see similar 3rd party loss in all 3 Financials.
 
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onQ123

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I don't know man lol. I mean I've never seen a Series X in stores, but Series S...definitely.

Just as far as the resale market, I always see people requesting to buy Series Xs as well...rarely a Series S. As far as PS5, doesn't matter whether it's digital or disc.
Microsoft is smart enough to know which version to make the most of , it's not a case of they are able to ship out more Series S consoles it's a case of them choosing to ship out more Series S consoles.
When the discless console is outselling the big bro almost 2:1 and you think of all the chest thumping in the UK physical sales threads...

Season 9 Lol GIF by The Office
You should also think of all the chest thumping in the DF threads about more pixels because most of the Xbox Series games are being played on Series S.
 
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onQ123

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I think 8.3 million consoles (if true) are pretty good. I was expecting less. Kudos to MS for moving hardware fast, in addition to upgrading server blades. Series S outselling Series X is also very interesting. Is it because of unit availability or was Phil right in predicting that Series S will eventually outsell Series X? Would be interesting to see its progress further.

16% growth is also fine, but it's not very telling because it'd be mostly powered by hardware revenue.

2% growth is interesting because, to be honest, I was expecting more. Xbox brought quite a few games this quarter to Gamepass (Ascent, Flight Simulator, Psychonauts 2, Hades, 12 Minutes, etc.) and also released two first-party games: MSFS and Psychonauts 2.

Many on this forum -- including me -- was under the impression that this quarter will see bigger GP growth, but it didn't happen. They have relatively bigger stuff lined up for Q4, so perhaps then.
Glad I'm not the only one that remember that Phil said Series S would sell more. They knew this from the data they was getting from Xbox One vs Xbox One X sales .
 
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elliot5

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Elaborate, please.
You could have 50% growth in game pass subs this quarter giving you 30M total subs and +$300M in revenue (+10M x $10 x 3 months). If lack of third party software sales ate in to the total category revenue (aka -$290M) that means you have net $10M revenue gain this quarter or let's say 2%.

That didn't mean game pass grew by only 1%. You can't just apply some % like that. The growth of the subs could be anything.
 
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Bernd Lauert

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You should also think of all the chest thumping in the DF threads about more pixels because most of the Xbox Series games are being played on Series S.
Nah, those threads are strictly technical comparisons between two consoles. The sales threads are used to prove how Gamepass is killing the gaming industry and how people only buy games on PS5 or whatever.
 

Kagey K

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Elaborate, please.
The 2% growth also equates for the decline of 3rd party games.

We need to know how much games like Fortnite, Warzone and other 3rd party games declined, before we can estimate actial game pass growth.

This would also include the Deathloop launch, which I guess proves PlayStation doesn't help MS growth.
 

Heisenberg007

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You could have 50% growth in game pass subs this quarter giving you 30M total subs and +$300M in revenue (+10M x $10 x 3 months). If lack of third party software sales ate in to the total category revenue (aka -$290M) that means you have net $10M revenue gain this quarter or let's say 2%.

That didn't mean game pass grew by only 1%. You can't just apply some % like that. The growth of the subs could be anything.
But this 2% only refers to GP and first-party, right? Not third-party?

I think my calculation was still wrong but not because of the reason you mentioned, but because of the reason R reksveks mentioned.
You don't know the decline of the content revenue or the ARPU of the new users in comparison to the old ones (specifically around the gamepass fee that they are paying)
Okay, so if I understand it correctly, this growth is about revenue -- 2% growth in GP and first-party revenue -- when previously whenever they mentioned GP growth, they mentioned subscribers?

In that case, y'all would be correct that the way I calculated was wrong. However, realistically, I don't think the numbers would be too far off from 20-21 million.
 
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