Microsoft generates less revenue from hardware and Windows, more from Xbox content

Microsoft has announced its quarterly results for the fourth quarter of fiscal 2023. The company again achieved lower turnover from the sale of devices and Windows licenses during that period. However, revenue from Xbox content such as Game Pass increased.

Microsoft reports in its quarterly figures that sales from PCs have fallen by four percent compared to a year ago. That equates to a turnover of $13.9 billion. The decline is partly due to a twelve percent lower turnover from the sale of Windows licenses to OEMs, which supply the operating system pre-installed on their laptops or desktops. Turnover from the sale of devices also fell by twenty percent.

The PC market has been experiencing a period of lower demand for several quarters. This is partly caused by the declining economy. Research firm IDC concluded earlier this month that PC shipments fell by 13.4 percent last quarter, partly due to ‘macroeconomic headwinds’ and declining demand from consumer and commercial sectors.

Microsoft also reports that its revenue from the Xbox division has increased. The company achieved five percent more turnover from Xbox services, which include Game Pass. This was partly offset by lower revenue from the sale of Xbox consoles themselves. Overall, Xbox revenue rose one percent to $36 million.

Microsoft’s other divisions also performed well last quarter. The company’s cloud business saw a 15 percent increase in revenue, amounting to $3.2 billion. That increase comes from Azure and ‘other cloud services’ from Microsoft. The company’s productivity division, which includes Office software and LinkedIn, achieved a ten percent increase in turnover to $1.7 billion.

In total, Microsoft recorded quarterly revenue of $56.2 billion, an increase of eight percent compared to last year. Quarterly profit rose by eighteen percent to $24.3 billion. In the entire fiscal year 2023, the tech giant achieved a turnover of 211.9 billion dollars and a profit of 89.7 billion, which represents an increase of seven and six percent respectively compared to 2022.