Xbox has recorded a 13% loss of revenue for Q2 when compared to the same period of the previous fiscal year. The Microsoft console has been subject to criticism for its lack of big exclusives in comparison to its biggest competitor, PlayStation. Xbox has largely relied on smaller titles like Immortality and Pentiment to carry it through 2022 in the face of delays for heavy hitters like Starfield and Redfall.
It isn't all bad news - Xbox has also reported a record number of monthly active users to the tune of 120 million, as well as "new highs" for Xbox Game Pass subscriptions thanks to its partnership with Riot Games. Microsoft also acknowledged that 2021 was a tough year to beat since that year had a strong showing in terms of exclusive content for the platform, along with the completion of the $7.5 billion acquisition of Bethesda, which saw franchises like Doom, Dishonored, and Fallout making their way onto Game Pass, significantly bolstering the service's value for subscribers.
The most concerning factor in the report is the fact that Xbox hardware revenue tanked by 13%, but this is unsurprising in light of the fact that the company had no big first-party exclusives for its gaming platform like it did in the same period of 2021, which saw the release of Halo Infinite and Forza Horizon 5. Microsoft doesn't seem to be expecting any improvements in the next quarter but could see a substantial increase in revenue with the release of games like Starfield and Redfall, which are scheduled to release this year. That said, neither of these big games has a solid release date as yet. Redfall is rumored to be getting a release date at the upcoming Xbox and Bethesda Developer Direct event, while Starfield will have its own separate showcase event.
Microsoft attempted to woo thrifty holiday shoppers by dropping the price of its Xbox Series S, but this seems to have done little to support overall hardware sales. Sony, on the other hand, had a strong year with hits like Horizon: Forbidden West and God of War Ragnarok drawing players to the PlayStation camp. Starfield will likely be a game-changer in the year to come as one of the most anticipated games of 2023 and an Xbox console exclusive.
It should not be forgotten that Microsoft is attempting to acquire Activision Blizzard at an eye-watering price tag of over $68 billion. This would bring some coveted franchises like Diablo, Warcraft, and Call of Duty into the Xbox stable, but the deal has been scuppered by various lawsuits in spite of various concessions offered up by Microsoft, including a 10-year licensing deal to keep the massively popular Call of Duty franchise on PlayStation consoles. Microsoft has also committed to bringing Call of Duty to Nintendo's Switch platform if the acquisition goes through.