Microsoft’s gaming division saw lackluster results in its latest earnings report.
The tech giant generated $52.7 billion in total revenue for the second quarter ending Dec. 31, 2022 — a 2% increase year-over-year. Its gaming division — led by Xbox content and services — reported a 13% year-over-year decline in sales in fiscal Q2.
Microsoft’s results were affected by the inflationary pressures and semiconductor shortage plaguing the tech industry. In 2022, the global gaming market experienced its first annual sales decline in at least a decade, with consumer spending declining around 4.3%, per Newzoo.
- Microsoft saw some of its revenue declines offset by its Xbox Game Pass offering.
- The subscription service provides access to a rotating catalog of games.
- Xbox Game Pass reported a record 120 million active users per month in fiscal Q2.
On Jan. 19, Microsoft announced that it would be cutting 10,000 jobs, reportedly involving layoffs within its gaming sector, including its 343 Industries and Bethesda Game Studios properties.
Microsoft has downsized just as roughly 300 quality-assurance employees at its subsidiary ZeniMax Studios voted to unionize. Microsoft purchased ZeniMax — the parent company of Bethesda — for $7.5 billion in 2021.
Up in the Air
In January 2022, Microsoft announced plans to acquire Activision Blizzard for $68.7 billion. The Federal Trade Commission sued to block the deal, saying the sale would harm competition.
The acquisition is also facing regulatory scrutiny in the European Union.
