Xbox Content and Hardware Revenue Grew by 34% and 232%, Respectively in Q1; Content Still Dominant w/ 80% Share

As far as financial quarters are concerned, Xbox just registered its best Q1 ever, thanks to the consistent growth of its Game Pass service and record-breaking hardware sales. The Xbox content and services revenue which includes first/third-party titles and Game Pass saw a growth of 34% in revenue, while the hardware revenue grew by a whopping 232%, primarily due to the launch of the next-gen Series X|S consoles. This resulted in overall revenue growth of 50% for the Xbox Gaming Division.

This marks the best Q1 for Microsoft’s Xbox Gaming Division ever since the company started reporting the figures for this segment in 2015. The increased adoption of the Game Pass on PC and console, and the launch of the next-generation consoles were the primary driving factors behind the strong growth. Although the hardware sales grew much more than content and services, the revenue from the latter still contributed to around 80% of the overall Xbox revenue.

Sony also released its Q1 earnings report, with an overall revenue forecast of 243.7 billion yen for the FY2021, an increase of 9% YoY. The launch of the PS5 console is expected to be the primary driving factor behind the increase, with the drop in sales of first-party titles and DLCs partially offsetting it. For the first quarter, the company reported an increase of 103.8 billion yen, thanks to higher game sales and services such as PS Plus. This was partially offset by the “strategic” pricing of the PS5 hardware (lower than manufacturing costs) and the increased PR and marketing prices for the next-gen console. The PS5 managed to marginally outsell the PS4 with a sales figure of 7.8 million (vs 7.6 million for the PS4). The second-year sales for the PS5 are expected to exceed 15 million whereas the PS4 was limited to 14.8 million.

In comparison, the Xbox Series X|S consoles are expected to have sold 4.5 to 5.8 million units since launch which is not too shabby considering that the Xbox One sold just around 4 million units in its first year.

Areej Syed

Processors, PC gaming, and the past. I have been writing about computer hardware for over seven years with more than 5000 published articles. Started off during engineering college and haven't stopped since. Mass Effect, Dragon Age, Divinity, Torment, Baldur's Gate and so much more... Contact: areejs12@hardwaretimes.com.
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