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Microsofts gaming revenue declines 7% in June 30 quarter

Xbox Game Pass is Microsoft's subscription service for games.

Xbox Game Pass is Microsoft’s subscription service for games.

Image Credit: Microsoft

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Microsoft revealed in its earnings report today that its gaming revenue declined 7% (5% in constant currency) in the fourth fiscal quarter ended June 30, in comparison to this past year.

Xbox content and service revenue declined 6% (4% in constant currency), driven by lower engagement hours and monetization in third-party and first-party content. It had been partially offset by growth in Xbox Game Pass subscriptions.

And Microsoft said that Xbox hardware revenue declined 11% (down 8% in constant currency). The entire division which includes gaming saw its operating income slip in the June quarter from $4.8 billion this past year to $4.6 billion in the newest quarter, but revenues grew from $14.1 billion this past year to $14.3 billion.

The More Personal Computing division includes gaming, including Xbox hardware and Xbox content and services, Xbox Game Pass along with other subscriptions, video gaming, third-party gaming royalties, cloud services and advertising.

Microsoft chief financial officer Amy Hood said within an analyst call that the outcomes usually do not include anything from Activision Blizzard, which Microsoft is along the way of shopping for for $68.5 billion. She said she still expects that deal to close in today’s fiscal year. Hood said gaming revenue was consistent with expectations.

Revenue for the More Personal Computing division is likely to grow 1% to 4% in constant currency, or $13 billion to $13.4 billion. Gaming is likely to decline in the low-to-mid single digits, driven by way of a decline in first-party title launches. That’ll be offset by growth in Xbox Game Pass, Hood said.

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