Xbox Fell Short of Annual Revenue Forecasts By Nearly $800 Million

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Game Pass Did Not Meet Targets Either!

While Microsoft has recovered from the last console generation, recent financial information has not lived up to the company’s expectations. According to TweakTown, Xbox missed annual revenue forecasts by nearly $800 million.

Why it matters: Microsoft has seen much better performance after the release of the Xbox Series S|X. The new consoles and Game Pass have provided a fresh start for Xbox, but the brand still struggles to meet expectations.

Xbox Gaming Quarterly Revenues
Xbox Gaming Quarterly Revenues

This information was revealed due to the ongoing case for the Activision Blizzard merger. The case file includes an eighty-page Microsoft document related to plans for Xbox growth.

Microsoft was targeting revenue of $17 billion for Q3 FY22 for the Xbox division. However, Xbox only made $16.22 billion in this quarter. As such, the gaming giant missed the target by a whopping $780 million.

While $16.22 billion is far from terrible, Microsoft previously admitted that Xbox is underperforming. During the recent hearings, Phil Spencer was questioned if Xbox was meeting internal targets.

He replied:

“It is not right now, No.“

Game Pass Subscription Growth
Game Pass Subscription Growth

Additionally, the report also highlights Microsoft’s expectations for Game Pass. Microsoft was hoping to grow Game Pass by 72.8%. However, the subscription was unable to meet this target.

Game Pass grew from 18 million to 25 million users, but Microsoft would have needed 6 million more subscribers to meet the goal.

Despite these hurdles, Xbox is currently in a much better position than before. With games like Starfield coming in 2023, the next few months should lead to a massive surge in Game Pass subscribers.

Xbox is also targeting at least four big games each year. Games like Hellblade 2 and Avowed are set to release next year, and more games will likely be announced in the coming months.

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