Xbox Hardware Sales Slow; Microsoft Earnings Roundup

Xbox Hardware Sales Slow; Microsoft Earnings Roundup 2

Microsoft reported earnings for its latest period yesterday, and the company’s gaming numbers were a mixture of gains and losses.

Microsoft has closed out the fourth quarter of its 2019 fiscal year with year-over-year decreases in both its game software and Xbox businesses; these declines come as the next generation of consoles looms on the horizon. This is a pretty normal occurrence when a next-gen launch is imminent, though it’s also common knowledge that the Xbox One has not done as well as hoped this generation.

For the quarter ending June 30th, the company reported a $233 million USD decrease in game revenue, down about 10 percent from the same period last year. That makes for just over $2.05 billion in game revenue, down from $2.29 billion during the same period last year.

Microsoft’s earnings report calls out a 48 percent year-over-year decline in Xbox hardware revenue specifically, noting that the shift was mainly due to a decrease in consoles sold during the quarter. Xbox software and services, meanwhile, fell by 3 percent year-over-year, offset partially by a 14 percent rise in subscriptions. Microsoft notes that it had a strong Q4 in that category last year caused by a major title (probably Fortnite), which likely also contributed to the year-over-year decline.

However, on a yearly basis, the company saw an increase in game revenue. Its games business as a whole saw $11.39 billion for the 2019 financial year, up from $10.35 billion in 2018. Monthly active Xbox Live users have also increased over the last year. As of June 30th, 2019, Xbox Live has 65 million MAUs, up from 57 million users at this same point last year.

Microsoft is one of the biggest companies in the world, and gaming is just one part of its businesses. Altogether, Microsoft posted revenue of $33.7 billion for the quarter, which was up 12 percent. Additionally, Microsoft made $13.2 billion in profit for the three-month period.

Looking ahead, major competitors Sony, Nintendo, and EA will all announce their own earnings on July 30th, while Take-Two and Activision will follow in August. It remains to be seen if there’s anything interesting to be found there, but we’ll keep our eyes peeled.

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