AAA gaming has been having a rough go of it the last few years. Microsoft's latest fiscal reports revealed a whopping $623 million drop in gaming revenue, compared to the same fiscal quarter last year.
The figure is bad enough on its own, but it gets worse when you realize that it represents a 9% year-on-year drop. Microsoft attributes the financial hit to "declines in Xbox hardware and Xbox content and services", letting on that Xbox consoles, games, and Game Pass sold 32% less than the same quarter a year ago.
Xbox fans have faced their share of struggles recently, with Microsoft hiking Game Pass prices three times in as many years, and increasing the price tag on the Xbox consoles not just once but twice in the same year (making them much pricier than the PlayStation) all while removing benefits.
If you're an Xbox gamer, Microsoft still promises it's in it for the long haul, as last October the company pinky-promised that it's not exiting the gaming market.
Microsoft is making more money than ever, but the "More Personal Computing" category, where the gaming income is included, represents only about 20% of the company's revenue. Some back-of-envelope math puts the Xbox section at around a third of that, thus at best an estimated 7% of the company's total revenue, depending on how you run the figures.
With Azure, cloud services, and the investment in OpenAI all seeing meteoric rises every quarter, it's not hard to see where the focus of the company is right now. Predictions that "gaming is dead" might be ten a penny, but the harsh reality is that just as with Nvidia, Intel, or AMD, Microsoft dropping a small portion of its business (or at least putting a hold on it) would hardly matter that much for its bottom line. At least the silicon shortage may lead to more optimized, and hopefully, original games.
