The devices revenue doesn't cover Microsoft's Xbox efforts, though. That's separated out into Xbox hardware revenue, which has dropped by 30 percent this quarter along with a slight increase of 3 percent in Xbox content and services revenue thanks to Xbox Game Pass growth. Overall, gaming revenue has declined 4 percent.
Microsoft sold fewer Xbox Series S / X consoles over the holiday quarter than it did at higher prices in the same period in 2022, and it looks like that has continued into the most recent quarter. Microsoft blames most of the Xbox hardware revenue decline on "increased console supply" during the same quarter last year, so it looks like the company is still struggling with hardware supply.