The Xbox Series X and S will be four years old this year, and Microsoft's latest earnings call has revealed that its newest generation of consoles just aren't selling like they used to. While software and service sales have been strong, helped along by the massive Activision acquisition, hardware sales have seen a sharp decline.
In its Q4 earnings presentation for the 2024 fiscal year, Microsoft noted that its gaming hardware sales have decreased significantly, with a 42% decline compared to the same period last year. Despite this, the company's overall gaming revenue was up 44%, with a 61% increase in content and services revenue that Microsoft says was "slightly ahead of expectations." Both of these growth figures were positively impacted by the Activision purchase, Microsoft says.
The call also suggests that third-party content may not have performed as well as expected for Xbox in Q4, with Microsoft noting that "stronger-than-expected performance in first-party content was partially offset by third-party content performance."
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