Microsoft’s latest earnings report does not make for pretty reading for Xbox, with overall gaming revenue decreasing in spite of an increase in Xbox Live users.
Over recent months, Microsoft has taken a go hard or go home approach to its Xbox brand. The company has revealed two new versions of the Xbox One, with the Xbox One S and the super-powered Project Scorpio. Given the tech giant’s recent earnings report, it’s easy to see why the company is trying to stoke the fires of Xbox.
According to the report, which covers both the most recent quarter and the full fiscal year, Microsoft’s gaming revenue for the year is actually down. In particular, hardware revenue for Xbox dropped by a huge 33 percent, which has been put down to a lower number of consoles sold, and the price decrease of the Xbox One. The overall decrease in gaming revenue ended up falling by $152 million – a 9 percent dip on the previous year.
It was hardly a great year for the entirety of Microsoft’s ‘More Personal Computing’ area, under which Xbox subsides. Overall, the division, which also includes the likes of Windows phones and tablets, saw a drop in revenue of $346 million, for a total of 4 percent. That said, Microsoft as a whole did see a profit of $16.8 billion, so it’s not all bad news for the company.
Indeed, there were even some bright spots to be found within Xbox itself. In particular, Xbox Live has had a tremendous year, jumping up to 49 million active users. This, in turn, led to extra cash for Microsoft itself, with Xbox Live revenue seeing an increase of 4 percent.
Although Xbox has not been making Microsoft as much money as perhaps expected, it does seem as though Microsoft gamers in general are still enjoying themselves. There was a 13 percent sequential increase in hours spent gaming on Xbox One, while Windows 10 users saw a 19 percent jump. However, that has not translated into additional revenue for the company.
With that in mind, it perhaps puts the decision to expand the range of Xbox One consoles into an even finer context. A drop in revenue from the console would no doubt have been expected, but such a dramatic fall could perhaps only be negated by giving players something new, be it in the form of a streamlined console arriving this August or the prospect of full 4K gaming in the future. Xbox still has a long way to go to match Sony’s PS4, and these new Xbox models could prove to be Microsoft’s best chance of getting back into the race.