Xbox console revenue fell 30 percent year-over-year this summer

It hasn’t been a good year for Xbox so far. Microsoft has released its earnings report for the quarter ending on September 30, and it has revealed that its revenue from the Xbox hardware fell by 30 percent year-over-year. Take note that the revenue decline doesn’t reflect any dip in sales caused by the console’s $20-to-$70 price hike, since that took effect on October 3. Similarly, Microsoft only raised the price for its Game Pass Ultimate subscription from $20 to $30 in October.

Meanwhile, revenue from Xbox content and services remained relatively unchanged from the same period last year. Microsoft says it saw growth from Xbox subscriptions and third-party content, but it was “partially offset” by the decline in first-party gaming content.

The Xbox division was one of the most affected teams when Microsoft started cutting down its global workforce earlier this year, with the company cancelling games that were being developed for the console. Microsoft scrapped the modern reimagining of Perfect Dark, a first-person shooter from the year 2000, and even closed down the Xbox studio working on it. The company also cancelled Everwild, a project that had long been in development by Xbox studio Rare, also in the midst of its mass layoffs.

Overall, Microsoft’s $77.7 billion revenue was 17 percent higher compared to the same period last year, and its operating income was up by 22 percent. Microsoft CEO Satya Nadella posted a few highlights about the company’s earnings call on X, mostly focusing on its AI efforts. He said that the company will increase its AI capacity by 80 percent this year and will double its data center footprint over the next two.