• Xbox consoles undersold in 2023, but software and content sales remain strong, fueled by major acquisitions like ZeniMax and Activision Blizzard.
  • Despite declining hardware sales, Xbox Game Pass continues to grow and is a consistent element of the Xbox brand, contributing to positive overall revenue projections.
  • While hardware sales declining is a natural part of the console life cycle, Xbox’s focus on software and content, along with major acquisitions, suggests a projected increase in content revenue despite lower console sales.

Xbox consoles undersold in the last quarter of 2023, and Microsoft CFO Amy Hood says that hardware sales will continue to decline over the next few years. This statement follows the news of Xbox’s impressive software and content sales, despite the recent controversy surrounding mass layoffs at the start of this year.

Though Xbox found success with the Xbox 360, it would eventually be overtaken by PlayStation, which would go on to hold a major lead in market share throughout the eighth console generation and into the ninth. Despite floundering hardware sales, Xbox has managed to maintain a strong grip on software and content, which has been ostensibly tightened thanks to major, expensive acquisitions like ZeniMax (Bethesda) and Activision Blizzard, which includes the mobile games giant King.


Every Major Video Game Release Coming Soon For Xbox Series X|S And Xbox One

Every upcoming new game release for the Xbox Series X|S, and Xbox One.

Xbox’s console revenue is expected to drop year-over-year, according to comments made by Amy Hood, as reported by The Verge. Despite Microsoft’s new status as a $3 trillion company, hardware sales are down across the board, with Xbox consoles in particular selling less than expected during the 2023 holiday season. Hood points to a “weaker than expected console market” when discussing the platform’s poor sales numbers last year, while predicting that revenue from Xbox hardware will decline over time.

Xbox Hardware Sales Are Down, But Software Revenue Is Projected to Increase

xbox microsoft activision blizzard

Hardware sales may be down, but Microsoft’s gaming division appears to be doing well overall. Hood explains that the company has high expectations for gaming sales following the Activision Blizzard acquisition, and Xbox Game Pass continues to grow, proving to be a consistent element of the Xbox brand, extending far beyond Microsoft’s hardware. Overall, the forecast for Xbox revenue is positive, even if hardware sales are expected to remain below competing brands like PlayStation and Nintendo.

Xbox hasn’t released hard numbers about Game Pass subscribers since January 2022, when the company stated that the service had grown to 25 million customers.

While there is plenty of debate surrounding each leading console and why one may be outselling the other, it’s important to point out that a decline in hardware sales is a natural part of any console’s life cycle. Still, Hood’s comments, along with Xbox’s lower-than-expected console sales, offer some insight into the company’s focus on software versus hardware. With Xbox now controlling flagship franchises from Activision Blizzard and Bethesda, the projected increase in content revenue seems likely, even if the brand continues to lag behind when it comes to console sales.

Xbox Series X offers seamless gaming experience with high-quality visuals.

Microsoft Xbox Series X

With a Game Pass membership and the most powerful system currently available, the Xbox Series X offers access to a virtually limitless selection of games. The Xbox Series X also boasts stunning graphics and lightning-fast loading times, delivering an unparalleled gaming experience.


2 A batteries required. (included)

5.94 x 11.85 x 5.94 inches

13.1 pounds


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