Xbox Q4 Hardware Revenue Declines 48%, But Xbox Live Monthly Active Users Increase

Microsoft has shared its financial results for the fiscal year ended on June 30, 2019, showing a 10% increase in terms of overall revenue  ($11.386 billion) in its gaming division but a huge decrease for what matters Xbox hardware sales over the last quarter. That’s quite anticipated, if you think we’re at the end of the generation, but perhaps not so much.

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Microsoft shared its financial results for the fiscal year that ended on June 30, 2019. They showed a 10 percent increase in terms of overall revenue ($11.386 billion) in its gaming division, but it’s a massive decrease in Xbox hardware sales over the last quarter. That’s an expectation as we’re nearing the end of the current console generation. But there’s more to do it than that.

The platform owner has seen fourth-quarter Xbox hardware sales revenue declining by 48 percent on a year-over-year (YoY) basis. They admitted that’s “primarily due to a decrease in volume of consoles sold,” via VGC. However, this isn’t the only bad news in the report, as fourth-quarter gaming revenue overall decreased by 10 percent YoY ($233 million). The fourth-quarter also saw Xbox software and services revenue decline by three percent YoY, “against a high prior year comparable from a third-party title, offset in part by subscriptions growth.” It’s not that bad, but you would’ve expected software to lead the way once hardware would stop selling. Perhaps this is the first time we see Xbox Game Pass having an impact there.

Good news comes instead from Xbox Live. Monthly users have grown once again, 14 percent YoY, from 57 million at the end of the previous fiscal year to 65 million. The push-on subscriptions and the launch of Xbox Game Pass Ultimate have had a positive influence on this metric, which Microsoft does care about at the end of the day.

Finally, the company is preparing for the next generation, since it has massively increased the expense of research and development: $580 million were spent on R&D more than the previous financial year, 15% year-over-year, also thanks to investment in the cloud, AI, GitHub, LinkedIn and of course, gaming.

With Project Scarlett launching holiday 2020 we sure were expecting something like that.


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