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In its Q4 financial report for fiscal 2022, Microsoft posted a 12% increase in revenue to USD 51.9 billion, but some of its businesses experienced a decline in revenue.
Businesses that experienced a decline include Windows and Xbox. The Windows business is Microsoft's core business, and has previously enjoyed increased sales during the pandemic.
But in the last quarter, according to Gartner data, PC shipments experienced a large decline, reaching 13%. This is the biggest drop in nine years, driven by high geopolitical tensions, inflation and component supply chain problems.
The Windows operating system business is certainly affected by this decline in PC shipments. Microsoft's revenue from Windows OEMs -- which comes from paying PC makers to Microsoft to pay for Windows usage -- declined 2%.
Microsoft describes this decline as a production stop and a deteriorating PC market.
"We saw some weakness in the market during the quarter, so that had an impact on us," said Kendra Goodenough, director of Microsoft investor relations.
But Microsoft CEO Satya Nadella still sees the positive side of this decline. According to him, although the PC market experienced changes during the quarter, Microsoft still saw higher PC shipments than before the pandemic.
However, this condition may change, considering that apart from being rare, the price of PC devices may also increase in the future, which could have an impact on the level of sales. This assumption arose from Intel's plan to increase the price of its processors and other chips due to rising production costs.
Meanwhile for Xbox, Microsoft's revenue from the console business decreased 11%, as well as a 6% decline from Xbox's revenue in terms of content and services. According to Microsoft, this decrease was due to decreased monetization and engagement duration, both for games made by Microsoft or third parties.