Despite an unusual amount of numbers showing a decline, including Xbox, Microsoft still outperformed the expectations.
Most forecasts had pointed to a more mixed quarter for Microsoft in the October-December period. And so it was. Compared to the same quarter in 2021, PC sales fell by 16%, which of course also negatively affected Windows.
Sales of so-called "Devices" (includes Surface and HoloLens) did not impress, dropping as much as 39% compared to the same quarter in 2021. Xbox did not fare well either, with sales of games and hardware being down 13% compared to quarter four in 2021, while Game Pass did increase its number of subscribers (without a new number being revealed, dare we hope we get this tonight during Developer_Direct at 8pm GMT / 9pm CET?).
But there were also positive things in the report and these include the cloud and the Azure servers, which grew by 18-31%. There were also big increases for both Office and LinkedIn. Overall, Microsoft's revenue increased by 2% compared to Q4 2021, which was more than the market expected, and the stock consequently took a 5% jump upwards in after-hours trading. Microsoft made a total net income of $16.4 billion during the October-December period (by comparison, Microsoft are paying $69 billion for Activision Blizzard).
Finally, it deserves to be pointed out that the fourth quarter of 2021 was Microsoft's best ever, and they sold an enormous amount of PCs and consoles during this period, boosted by the release of both Forza Horizon 5 and Halo Infinite (to be compared with only Pentiment in the same period of 2022).