Microsoft’s Xbox sales fell 13% while game system content and services fell 12% in revenue, the company said on Tuesday as part of its quarterly earnings report for the three months ended March 1. December 31.
Total revenue for the games division was down 13% year over year.
In a presentation to analysts, the company said the drop in Xbox content and services revenue was due to year-over-year comparisons to a “strong previous year”, a drop in first-party content and monetization. from lower third-party content. Part of the drop in revenue was partially offset by a growing number of subscribers to Xbox Game Pass, a subscription service that gives users access to Xbox games on consoles, PCs, and mobile devices. .
Hardware revenue for game consoles also fell during the quarter due to lower holiday prices and an overall decline in total device sales.
Microsoft reported its earnings after announcing a massive layoff earlier this month that will affect about 10,000 employees. The cuts are expected to end in the third quarter of this year and follow similar layoffs at other tech companies like Amazon and Meta.
The tech company, led by CEO Satya Nadella, is also facing regulatory hurdles over its $68.7 billion acquisition of game company Activision Blizzard. In December, the Federal Trade Commission sued to block the sale due to antitrust concerns.
In her prepared speech, Nadella made no mention of the ongoing legal battle other than noting that the company is still looking to finalize the deal this financial year.