Xbox delivers best Q1 in history with $3.61 billion in revenues in Q1 FY23

Microsoft kicks off its new Fiscal Year 2023 period with record Xbox revenues.

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Xbox gaming just made history for the time this year. On the heels of generated a record-breaking $16.2 billion in total earnings last year, Microsoft's games platform has generated $3.610 billion in its Q1'23 period. This is a new all-time Q1 high that continues the platform's earnings streak.

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Xbox Q1'23 Earnings

• $3.610 billion, best Q1 of all time
• $2.797 billion from content & services, 77% of revenues
• $813 million from hardware, 23% of revenues
• Xbox Game Pass subscriptions helped stabilize lower third-party and first-party sales, but monetization remained stable
• Xbox hardware up 13% year over year

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Xbox content and services revenues were down 4% year-over-year, implying revenues of about $2.797 billion. Hardware was the main driver for these record Q1 results with a strong 13% increase in revenues, driven by higher premium costs of the newer Xbox Series S/X consoles.

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Based on the figures, Xbox hardware generated around $813 million, which is the second-highest Q1 period for hardware in Xbox history (interestingly enough, Q1 FY15 generated $893 million due to strong Xbox One sales.

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Microsoft says that Xbox Game Pass revenues helped stabilize content & services revenues as third-party and first-party games slipped, with Xbox console hardware also picking up the slack and helping surge.

The company did not give updates on Xbox Game Pass subscriber counts, subscription revenues, or Xbox LIVE MAUs across its ecosystem of platforms.

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Gaming revenue increased slightly driven by growth in Xbox hardware, offset in part by a decline in Xbox content and services. Xbox hardware revenue increased 13% driven by higher volume and price of consoles sold. Xbox content and services revenue decreased 3% driven by declines in first-party content and in third-party content, with lower engagement hours and higher rate of monetization, offset in part by growth in Xbox Game Pass subscriptions.