Xbox Hardware Revenue Declined By Whopping 42% In FY24 Q4

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Xbox Needs To Do Something About Its Consoles!

Story Highlight
  • Microsoft has reported mostly encouraging financial results in its FY24 Q4 earnings report.
  • Overall revenue for the gaming sector is up by 44%, but console revenue is down.
  • Following major losses in console revenue last quarter, this segment saw losses of 42% this quarter.

Microsoft has just shared fresh figures for its quarterly earnings. Q4 2024 has proven to be another strong month for the company, with the gaming division continuing to report impressive results, thanks to Activision Blizzard.

However, just as expected, Xbox hardware revenue has taken another hit, dropping by over 40% year-on-year.

Why it matters: Following the last quarterly report, Xbox already predicted a decline in hardware revenue.

Xbox Controller
Xbox Consoles Are In A Difficult Spot

Between April and June, Xbox made a whopping $1.68 billion from Activision Blizzard alone. Needless to say, the content and services segment saw a major bump year-on-year, leading to a 61% increase.

Overall, Microsoft Gaming’s earnings were up by 44%, but the console market painted a worse picture. Xbox’s hardware revenue decreased by a whopping 42%, highlighting the company’s continued struggles with this segment.

Recent messages of Xbox telling its fans that a console is no longer needed to enjoy the perks of gaming likely haven’t helped either. This is also not the first time hardware revenue has taken a hit, so Microsoft needs to address the situation.

Xbox Game Pass
Microsoft’s Focus On Content Seems To Be Working

As it stands, Microsoft seems to be sacrificing its console revenue to focus on content and services. While this approach could work in the long term, it would most certainly lead to the death of its console business.

The gaming giant’s future seems to revolve around Game Pass and first-party releases. As such, we would not be surprised if console revenue took a hit yet again in FY25.

However, this would be disappointing to see, considering the legacy consoles like the Xbox 360, left behind. Following the recent marketplace closure, fans fondly looked back on this hardware for everything it did right. It seems no other Xbox will be seen in a similar light.

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