Gaming revenues down 9% at Microsoft as hardware sales slow

Update: Xbox One price cut to $249 in the US for a "limited time" as new consoles loom

Microsoft issued its quarterly financial report yesterday, painting a profitable picture for the company as a whole despite mixed fortunes for the Xbox division.

Gaming revenue at the platform holder was down by nine per cent, a drop of $152 million. Console hardware revenues were down by a third, "mainly due to a decline in consoles sold and lower prices of consoles sold" - presumably an indication of declining market interest for a machine which many see as soon being superseded by the forthcoming model S and Scorpio. The 4K-supporting Xbox One S is due to launch in a fortnight, whilst the Scorpio is expected to be available in the winter of 2017.

On the digital side, Xbox Live revenues were up by four per cent, "driven by higher volume of transactions and revenue per transaction." Active Live users also jumped, climbing by 33% year-on-year to 49 million.

Overall corporate results

  • Revenue was $85.3 billion GAAP, and $92.0 billion non-GAAP
  • Operating income was $20.2 billion GAAP, and $27.9 billion non-GAAP
  • Net income was $16.8 billion GAAP, and $22.3 billion non-GAAP
  • Diluted earnings per share was $2.10 GAAP, and $2.79 non-GAAP

Update: Microsoft is dropping the price of the 500GB Xbox One in the US to $249.

The deal was announced by Larry "Major Nelson" Hryb via Twitter, with Hryb emphasising that the offer would be "for a limited time" and only in the US. The 500GB Xbox One also includes a choice of one of four games: Forza Motorsport 6, Rise of the Tomb Raider, Gears of War: Ultimate Edition or Rare Replay.

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Latest comments (2)

Ben Link Video Game Enthusiast and Graphic Artist 2 years ago
The original Xbox One sales being down seems logical to me. Xbox One S is almost here. As far as Xbox Live users being up. It's because Microsoft has been offering great Games with Gold games every month. Also cross play has been a great incentive. Just one example is having a playlist in Rocket league double the size it used to be. Having PC players also in the playlist has been awesome.

Edited 1 times. Last edit by Ben Link on 20th July 2016 4:47pm

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Jordan Lund Columnist 2 years ago
So you announce two new hardware plaforms and people are shocked that existing hardware sales drop? Shocked! I am shocked I say! Gambling? In THIS establishment?
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