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Xbox Gaming Revenue Falls on Lower Console Sales, But Xbox Live Reaches 49 Million Monthly Users

News Bot Jul 19, 2016

  1. News Bot

    News Bot Chaos Immortal

    Microsoft today reported earnings for the quarter and fiscal full year ended June 30. The company no longer shares Xbox sales numbers, but the report does include some data that speaks to the health of the Xbox business.
    Revenue from Xbox Live rose compared to the same period last year, jumping 4 percent as a result of more transactions overall and more money spent per transaction. However, this was not enough offset decreases in hardware revenue. Xbox hardware revenue dropped by a significant 33 percent, with the downturn attributed mainly to fewer consoles sold and the lower prices of systems sold.
    Overall, Microsoft's gaming revenue for the period fell $152 million, which represents a 9 percent dip.
    The number of Xbox Live monthly active users reached 49 million during the period, up 33 percent from 37 million a year ago. An active user is defined as someone who has signed into Xbox Live in the past month, presumably either through a paid Xbox Live Gold or free Silver account. By comparison, Sony recently reported that it had 20.8 million PlayStation Plus subscribers across all platforms; this is basically the equivalent of Xbox Live Gold.
    The Xbox business is included in Microsoft's "More Personal Computing" sector, which also comprises Windows, phones, and search advertising. This division saw its revenue fall $346 million or 4 percent, mainly due to gaming and Microsoft's "Devices" segment that includes phones and tablets. This was a particularly challenging quarter for Devices, as revenue fell $782 million or 35 percent, with phone revenue alone decreasing $870 million or 71 percent due to a "reduction in volume of phones sold."
    In May, Microsoft announced that it was scaling back its phone business, but not exiting the category altogether. As a result of this, Microsoft cut 1,800 jobs and took a $950 million hit.
    On the brighter side, Microsoft said "excitement for new games on Xbox One and Windows 10 led to a 13 percent sequential increase in hours spent on gaming on Xbox One and a nearly 19 percent sequential increase in hours gaming on Windows 10 PCs."
    Overall, Microsoft made a $3.1 billion profit for the quarter on revenue of $20.6 billion. This compares to a loss of $3.2 billion and revenue of $22.2 billion. For the fiscal year also ended June 30, Microsoft made a profit of $16.8 billion, while revenue for the year was $85.3 billion, which compares to a profit of $12.2 billion on revenue of $93.6 billion last year.
    Microsoft will hold an earnings call to discuss these results, beginning at 2:30 PM PT / 5:30 PM ET. Check back with GameSpot for more.


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