Xbox CEO Asha Sharma has admitted that Xbox have a lot of work to do after Microsoft’s latest earnings report showed yet another decline in revenue for its games division.
The Q3 earnings report, which covers financials from January 1st to March 31st, revealed that Xbox content and services revenue was down 5% when compared to the same period last year.
Meanwhile, Xbox’s hardware revenue has been hit even harder, with a 33% year-on-year decline, with rising console prices undoubtedly a contributing factor.
It’s news that has become all too familiar at Xbox in recent months, with its Q2 earnings having shown year-on-year declines of 5% and 32% respectively. Q1, meanwhile, showed a growth of 1% in content and services but a 29% decline in hardware revenue.
In an earnings call discussing the latest earnings report, Microsoft CEO Satya Nadella said that “foundational work” was currently underway at Xbox to “win back fans and strengthen engagement”.
“In the near term, we are focused on fundamentals, prioritising quality and serving our core users better,” Nadella explained. “You see this in the work underway across our consumer products. With Windows, we recently announced performance improvements for lower memory devices, streamlined the Windows Update experience, and brought back focus to core features and fundamentals that matter most to our customers.”
“And you also see this in Xbox, where the team is recommitting to our core fans and players and shaping the future of play.”
In a post on X, Sharma shared her reaction to the latest earnings report, stating that “we have work to do”.
“Xbox earnings today,” Sharma wrote. “While we have made progress expanding the business and our margins, player and revenue growth has not yet met our ambition.”
“We know we have work to do to earn every player today and into the future.”
Sharma – who was appointed Xbox CEO in February – has already begun working with Chief Content Officer Matt Booty on turning around Xbox’s fortunes.
Last week, it was announced that both Game Pass Ultimate and Game Pass for PC would be getting a price cut, after Sharma admitted that the price of Xbox’s subscription services had become “too expensive”.
Days after the price cut announcement, Sharma and Booty shared Xbox’s new mission statement, which revealed that leadership are “reevaluating” its approach to exclusivity and AI.