After last year’s pandemic-related records, Microsoft’s PC and Xbox sales fell in the second quarter.
In the second quarter of fiscal 2023 (ended December 31, 2022), Microsoft reported revenue of $52.7 billion. Net income was $16.4 billion. That means a 2 percent increase in sales, but a 12 percent drop in net profit.
A tough quarter had previously been predicted for the Windows OEM and hardware sectors. Analysts reported a 16 percent decline in PC shipments in 2022 and a 29 percent decline in the fourth quarter year-over-year.
There hasn’t been a major quarterly drop in shipments since the PC market tanked in 1991, which has now hit Microsoft hard on Windows sales. Sales of OEM versions of Windows fell 39 percent in the second quarter, which Microsoft attributes to the continued weakness of the PC market.
The drop in record values after Corona was expected, as many consumers had already bought a new PC or laptop at that time.
Microsoft CEO Satya Nadella said, “While the number of PCs shipped decreased during the quarter and returned to pre-crisis levels, the intensity of Windows use continues to be higher than pre-crisis levels, with time spent on PCs down around 10 percent has increased.”
The situation in the PC market also affected the sales of devices such as Surface, HoloLens and PC accessories. Sales here decreased by 39 percent.
In the Xbox division, the group recorded a 13 percent decline in hardware. And revenue from Xbox content and services is down 12 percent.
Microsoft It represents a significant decline from the prior year, partially offset by growth in Xbox Game Pass subscriptions. Additionally, the decline in Xbox consoles “was due to lower prices and the volume of consoles sold.” For example, the price of the Xbox Series S was reduced to $249.99 for Christmas, but more Xbox Series X|S devices were sold at higher prices compared to the same period in 2022.
Microsoft’s game sales continued to decline by 13 percent year over year.