Xbox Console Sales Continue to Rise as Supply Chain Issues Relax

Sony’s PS5 isn’t the only console benefitting from improved supply chains this year. Xbox console sales are also on the way up, according to the company’s first-quarter earnings report.

Microsoft doesn’t usually give hard numbers, but the company reported that hardware sales were up 13% for the period between July and September compared to the same period last year. For some context, that same period last year (2021) saw an increase of a whopping 166% over the period before that (2020), which was when the Xbox One was on its last legs and the Xbox Series S and X hadn’t been released yet.

To put it more simply, Microsoft sold a bunch of Xboxes in its first Q1 after its new hardware launch and now, a year later, it’s selling even more than that.

For some further comparison, Microsoft reported that hardware sales last quarter were down 11% from the prior year — so the 13% rise is indicative of something different this quarter. It’s not likely connected to a big software launch, since Xbox didn’t really have any needle movers during that period, and its first and third party content sales were down. In fact, its overall content services revenue was down 3%, with declines in content and engagement hours offset by an increase in Game Pass subscriptions.

What’s much more likely here is that supply chains are loosening up after a multi-year period of struggle with getting necessary microchips for graphics cards and other technological products. We’ve already seen how this has impacted Sony’s PS5, and it’s not surprising that Xbox’s hardware would be selling better also.

In total, Xbox reported $3.61 billion in revenue for the gaming segment this past quarter, which is just ever-so-slightly up from last year, making this a record first quarter for the segment. Overall, Microsoft revenue totaled $50.1 billion, up 11% year-over-year.

Update 2:48pm PT: On today’s earnings call, CEO Satya Nadella revealed that PC Game Pass subscriptions specifically are up 159% from the same time last year – the service for PC launched in the summer of 2019. He also stated that over 20 million people have used Xbox cloud gaming services to date.

Update 3:07pm PT: Microsoft announced its projections for the next quarter for the gaming segment, expecting revenue to decline in the low to mid teens due to being put up against a bunch of first-party releases during the same period last year. This is expected to be offset by Xbox Game Pass subscriber growth. And content and services revenue is expected to decline in the low to mid-teens. The company did not offer any hardware guidance.

Rebekah Valentine is a news reporter for IGN. You can find her on Twitter @duckvalentine.

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