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The Highs And Lows Of Microsoft’s Q4 Financial Results

Microsoft recently posted its Q4 2022 financial results. And, while some parts of the business continued to show growth, other areas (like the gaming sector) failed to live up to the expectations of industry experts.

The organization reported that revenues increased by 12% from the previous quarter to hit $51.9 billion. Meanwhile, net income received a 2% bump to reach $16.7 billion.

Even though the business is thriving overall, Microsoft’s video game segment struggled during the fourth quarter. Xbox’s hardware sales ended up falling by 11% when compared to the third quarter. Also, revenue from content and services was down 6%.

While one could expect that Xbox Game Pass subscription numbers would also take a hit, that may not have actually been the case. As a matter of fact, it sounds like the number of Game Pass subscribers has grown, helping offset some of the losses experienced by the company’s gaming division.

“We did see the market weaken through the quarter, so that did impact our results,” said Kendra Goodenough, the director of Microsoft investor relations, to The Verge.

The Profit‘s Take:

We have talked about Game Pass MANY times. But, maybe we’re starting to see that Game Pass growth can’t make up for losses in other places just yet. We called this forever ago. This proves the use-case for cloud gaming platforms serving as a funnel to more serious gaming. Companies are coming back down to earth after experiencing record growth in 2020 and 2021. This same thing is happening to Sony. The Game Pass subscriber base will be incredibly powerful long-term. But, Microsoft will need to continue feeding the beast and eliminating reasons for people to unsubscribe.

(All information was provided by Shacknews and The Verge)

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