Microsoft has released the financial results for the latest quarter and revenues generated by the Xbox business have fallen.
As a whole, Microsoft is in decent shape. Its results surpassed Wall Street expectations, albeit by a narrow margin, with reports of $6.17bn in profits (on a GAAP basis) and $24bn in revenue for the three months ending December 31st.
However, GamaSutra reports that combined sales of games hardware and software fell by 3% when compared to the same period last year. Microsoft has attributed this to "lower Xbox console revenue offset by Xbox software and services revenue growth".
The implication is that it's the hardware element of the business letting the side down. The Xbox One and Xbox One S have generated less revenue than the firm had hoped, due to both pricing cuts and lower sales.
The damage has been limited thanks to growth in software and services, which saw sales rise by 18% year-on-year. The number of monthly active users for Xbox Live has also grown by 15%, now at 55m - although it should be noted this includes users across Windows 10 and mobile devices, as well as Xbox consoles.
All hopes will no doubt be pinned on the upcoming Project Scorpio, the enhanced Xbox One console due to launch later this year, to rescue falling hardware sales at Microsoft's games division.