Xbox Hardware Revenue Declines by 48% YoY; Microsoft's Gaming Revenue Drops by 10%; Xbox Live Up 14%

Today Microsoft announced its financial results for the fourth quarter of the fiscal year 2019, related to the period between April 1 and June 30.

[PhoenixUp]

I’m curious of those 65 million active users how many are XBLG subscribers

[DaDrunkenJester]

Drops in hardware revenue are to be expected, but the fact that Xbox Live keeps going up is probably due to GamePass and the GamePass Ultimate bundle.

[lxeasy]

Yeah This late in the generation everyone will most likely experience drops in Hardware sales. Whats impressive is the fact that Xbox Live keeps going up thanks to Xbox GamePass. I recently got the GamePass Ultimate bundle and its amazing.

[DaDrunkenJester]

Xbox GamePass being on PC now also helps a lot.

[mcstorm]

L easy microsoft made a smart move with including pc. For me this should of been done when they made the original xbox but microsoft as a company are totally different now and they know subscriptions are where they are growing and know that people want there software over others. (Google, Apple ect) with xcloud now also on the way and if Microsoft can get it on the switch and all over mobile and other devices the numbers will also go up. Especially with Gamepass.
Xbox is also another rout they need to keep but what they have done is create a space in gaming where the Xbox console dose not have to reach 70+ million to be successful.

For me I made the switch from console to pc due to less time I have to game but I have not really lost any of my xbox games I owned and we could see alot of people do this when xcloud is out if its priced right and has gamepass.

[StormSnooper]

But that is a huge drop. Pretty sure Nintendo is selling like hot cakes. They might catch up to them even. But I’m pretty sure MS is making bank. To hell with consoles.

[gravedigger]

Yeah, now with GP available on PC.

But HW sales.....uf.

Last quarter, was 33% decline in hardware sales. Now this in Q is almost 50%

They can give Xbone for free, nobody would care. Xbone SAD was flop looks like it.

Also software revenue is down. Yeah, it’s been said for the last year that Gamepass is supposed to turn everything around and boost Xbone sales but it’s not. Looks like Gamepass for 1$ contributed to this decline in revenue. Who wants to buy game for 60 and support the devs anyway.

Who still believe in Phil Spencer?

[DaDrunkenJester]

You get millions of people subbed for $1, then you hook them to keep paying monthly. I'm sure it will all balance out eventually. Xbox revenue is usually positive so I doubt this low quarter will last.

[DJStotty]

The developers get a pay day for the game being included in gamepass, in no way are they left unsupported or out of pocket.

The game is timed in the service according to a contract drawn out between the manufacturer (microsoft) and said developer, this is their compensation for any loss in sales.

Once the contract is coming to an end, the gamer has the option to OWN the game, for a reduced price. Effectively giving said developer more money. So in effect, developers can potentially double their profits for having their games in gamepass (hence why we have games like monstor hunter world, metro exodus) in with the service.

So to answer your question, yes i still believe in Phil spencer, he gave us the most powerful console available, and the next one may be the most powerful again who knows, he ditched the kinect, started focusing on games (more studios, exclusives etc), so do you think he has done a poor job?

[gravedigger]

@DjStotty

Yes, he has done a poor job. Sales have never been worse.

[DJStotty]

@gravedigger

in your opinion, sales have never been worse.

Fiscal Year 2019 Results

Microsoft Corp. today announced the following results for the fiscal year ended June 30, 2019, as compared to the corresponding period of last fiscal year:

· Revenue was $125.8 billion and increased 14%

· Operating income was $43.0 billion and increased 23%

· Net income was $39.2 billion GAAP and $36.8 billion non-GAAP, and increased 137% and 22%, respectively

· Diluted earnings per share was $5.06 GAAP and $4.75 non-GAAP, and increased 138% and 22%, respectively

· GAAP results include a $2.6 billion net income tax benefit explained in the Non-GAAP Definition section below

But yeah, they doing so bad

[gravedigger]

@DJStotty

This article isn't about whole MS company, it's about Xbox. Nice try, though

Yeah, SALES HAVE NEVER BEEN WORSE.

[gravedigger]

Also just noticed MAU are up, but revenue is still down. Something is wrong....badly

[Imortus_san]

Just make the One S for 200e and Hardware sales will increase again.

[Sgt_Slaughter]

That's not how this works. You need games first and foremost to sell systems, just look at Switch and PS4 which have much better hardware sales numbers for a higher price than the Xbox One S.

[Imortus_san]

Wii outsold PS3 and Xbox 360 just by being cheaper.

[RpgSama]

Wii outsold the PS3 and 360 because they were going for an entirely different market and people

[S2Killinit]

oh it will be fine. They will release a cheap streaming console option next generation to boost those monthly subscriptions. They are fine. MS will make bank.

[Kingthrash360]

But what do us gamers get?

[Kribwalker]

Project Scarlett

[xX-oldboy-Xx]

Continued support for one x and Scarlett, sorry one s owners you'll be forgotten.

[The_Sage]

It seems to me that Microsoft is positioning itself to become a streaming service. They will release the Scarlett then start moving towards a streaming service like Google is wanting to do with Stadia. Playing the next Halo, or Forza on PlayStation is looking more and more like a possibility.

[SamPao]

and to think that playstation would allow a streaming service from a direct competitor on their own console is a dream that will remain in the clouds.

They might allow publishers, but never a streaming service. there would be no money left for the developers...

[ReadyPlayer22]

Microsoft wants to be literally everywhere and their requirement will be Xbox live on PlayStation. You REALLY think Sony's going to allow that?

[Imortus_san]

For those that are happy with streaming it's good for then, if it ever happened MS with get more cash out of the PS5 then every other company.

[LordJamar]

Delusional

[DJStotty]

Stadia is not going to be as popular as people think

[TGGJustin]

Not even a price cut will help those poor sales for the Xbox One. Fact of the matter is you can already find one for $200 or less all the time. I constantly see Wario tweeting out deals for an Xbox One S for like $180. People just aren't buying them. If their sales are this poor now just wait as they still have a year and a half until next gen.

[CaptainCook]

Microsoft doesn't care about console sales. They want gamers to be part of their ecosystem.

(Windows 10 and Xbox consoles)

[kayoss]

sure, but ms is released more variation of the xbox consoles this gen than their competitor. they even announced multiple consoles for next gen. so are you sure they dont care about consoles?

[DJStotty]

Companies rarely make profit on console sales, the profit is in games and services

[Soap_Z]

I am a PC Xbox Live user to play solitaire everyday

[NarutoFox]

Gamepass is helping a little but the problem is Microsoft still don't have one good first party exclusive that stands out this gen imo

[Automatic79]

@Naruto

"Gamepass is helping a little but the problem is Microsoft"

Blair Witch
Gears 5
Outer Worlds
Ori 2
BattleToads
Bleeding Edge
Wasteland 3
Flight Simulator
Crossfire X
Psychonauts
Halo Infinite

There is no problem upcoming games prove that Xbox GamePass has bangers.

Xbox is the console gamers want to play games on because new studios working hard to prove that games will come for all. Add the Indies who are working hard to deliver. This is the system I will primarily play on.

I buy games and I am investing in GsmePass due to the amount of titles that they circulate in their monthly catalogue. I wouldn't even purchase some but now i get to play them thanks to GamePass. Even with subscription I pick and choose my purchases because GamePass serves as my prescreen and demo before I make final decision on the games I want to purchase. Own 500 games on Xbox One from OG Xbox to Xbox One. .

[UniqueGuy91]

Except for Gears and Halo, everything else is at A/AA titles. These small games may be good but these are not the games that make people go "I want to get that console to play that".

[trooper_]

How does that entice someone who wants to play new games on a new console?

Oh...ohhhh...

[stuna1]

Are any of those out yet!?

[TheHateTheyGive]

Gamepass and 3rd parties is xbox saving grace, they better take care of the 3rd parties that provide games for xboxone only saving grace game pass.

[ShadowWolf712]

Bro their revenue was actually DOWN 3% on services like Gamepass.

The current pricing is unsustainable long-term, they're eventually gonna have to raise the price on people and just hope they get slow-boiled and stick around.

[TheHateTheyGive]

Bro you know. They literally giving away gamepass to save face for the lack of exclusives.

[XiNatsuDragnel]

As expected but no exclusives = lower sales

[xX-oldboy-Xx]

Looks like their strategy is paying off, just focus on gamepass and subscription services ms.

Anyone with any sense would buy a PC over anything ms is offering and the smarter ones would steer clear of their subscription services.

The road to becoming a service provider is becoming clearer and clearer.

[Thundercat77]

I don't see how this strategy is helping them in anyway.

[xX-oldboy-Xx]

Should I have put /s at the end? Clearly I despise ms and all they stand for. It was a tongue in cheek comment.

[gam3r_4_lif3]

Dont worry thunderpants if reading is not your strength, to get the meaning from sadboys comments just know that it is a negative comment about MS/xbox

[DJStotty]

They have publicly stated there is no intention of leaving the console business.

Just because they may put xbox live on other devices, doesnt mean they will not want a central box in customers livings rooms.

[xX-oldboy-Xx]

Pushing pretty hard on the PC side of things, wouldn't surprised in the slightest if they drop out after next gen. Trust them as far as I can throw them.

Surely you're aware that ms are a grubby company, one of the grubbiest - maybe you're not aware. Can't help you mate.

[DJStotty]

And where would PC's be without them eh?

Not to mention the Azure service that Sony are going to be utlising.

Surely your aware, that although a grubby company, the world would be a very different place without them. maybe you're not aware. Can't help you mate.

Oh, and before i get disagrees galore with the sony mention,

https://news.microsoft.com/...

[Thundercat77]

Hardware revenue decline despite the Xbox one s, x and the sad edition and I expect yhis decline was from an already bad decline last year.

Also, that gaming and software revenue decline. Could be propelled by gamepass since xbox users are no longer buying software but playing them on a 1$ subscription.

Xbox is in very bad shape to enter next gen. Hardware power alone will not make the difference. They better hurry with those multiplatform plans they have.

[stuna1]

This^^^^^^!

Anyone thinking Microsoft will be able to flourish on just a subscription service and Gamepass are just fooling themselves! Even though consoles sale at a loss initially later in the gen depending on manufacturing processes some console makers are able to start recouping losses, or at the very least offset losses.

On top of this Xbox fans are definitely not buying the software, because why would they need too, if they can sign up for Gamepass and play whatever games they want to play for a fraction of the retail price and then unsubscribe.

[LordJamar]

I don’t think you get how business works or how gamepass works

[rainslacker]

Even if MS did well on subs, I'd question if developers would still support the console and make as many games for it if a bulk of their userbase was using it as a sub service device. MS can only maintain so many games on the service at one time and remain profitable....assuming they're profitable to begin with. If a dev isn't one of the 200 to 300 chosen to be on the service, then they dont get squat from MS and game pass can easily cannibalize sales of both games on the service, and other games for sale not on the service.

[LordJamar]

That dollar thing is just a limited deal and we just gonna ignore all the studios they bought to make new games? Ok seems legit I don’t think there in bad shape at all for next gen there they are the exact opposite they clearly prepareing for next gen and are gonna come out the door swinging this gen has been lost a long time ago every one knows this from Xbox 2013 to Kinect to other mistakes it’s been a uphill battle next gen will be when they start to battle agian there is a reason Sony does not underestimate Microsoft like the fanboys do

[AK91]

Microsoft’s play anywhere strategy is starting to make sense.

[NarutoFox]

😂😁

[badz149]

should have renamed it to "play anywhere else but xbox" LOL

[CaptainCook]

Microsoft games, you're using Xbox services.

[william_cade]

Since after the 360, the Xbox has felt like one of those bargain bin consoles you find at a garage sale with rat poop stains on it.

[rlow1]

Microsoft Cloud Powers Record Fourth Quarter Results

REDMOND, Wash. — July 18, 2019 — Microsoft Corp. today announced the following results for the quarter ended June 30, 2019, as compared to the corresponding period of last fiscal year:

· Revenue was $33.7 billion and increased 12%

· Operating income was $12.4 billion and increased 20%

· Net income was $13.2 billion GAAP and $10.6 billion non-GAAP, and increased 49% and 21%, respectively

· Diluted earnings per share was $1.71 GAAP and $1.37 non-GAAP, and increased 50% and 21%, respectively

· GAAP results include a $2.6 billion net income tax benefit explained in the Non-

Looks like a good year for them....overall.....summer is usually a slow period for alot of companies....so it's impressive they had record quarter.....I think as their subscription service takes off and they are able to add.... Quality first party games......key word "quality"......they see a bigger profit.

[nismo370]

Xbox Hardware Revenue Declines by 48% YoY; Microsoft's Gaming Revenue Drops by 10%.

[Ristul]

Thats a massive drop in hardware revenue.

[gam3r_4_lif3]

They announced new hardware at E3 2018. Most see this gen as a dud for MS and are waiting on next gen.

[rlow1]

Not sure what your smoking but this is the official report. Their stock went up on announcing this...….but if you want to stick to your distorted view of the real world...knock yourself out....this is the internet after all....lol

[littletad]

"However on a yearly basis, the company saw an increase in game revenue. Its games business as a whole saw $11.39 billion for the 2019 financial year, up from $10.35 billion in 2018. Monthly active Xbox Live users have also increased over the last year. As of June 30, 2019, Xbox Live has 65 million MAUs, up from 57 million at this same point last year."

[trooper_]

How does that actually help the console itself?

Please, keep la-laing over the bleak news. I'm sure it'll disappear soon! /s

[littletad]

Are you serious? Year over year increased game revenue doesn't help? Okay, smart guy.

[rainslacker]

That revenue is not coming from the consoles though. Or at least, hardware revenue saw a sharp decline, while services saw an increase. Overall, there was an increase in gaming revenue.

[ILostMyMind]

More subscribers for less, much less money.

[Bennibop]

Yep I know longer pay for my gold, I just use the Microsoft rewards system. How many others are doing the same, also how many of the live customers are gold. This is not a good situation for xbox division.
No reason to purchase games when you can get game pass for £1 and or free through rewards. It just not a sustainable practice for any involved

[rob-GP]

"Xbox Live Up 14%"... Wasn't it the number of active users was up by 1% - not 'Xbox Live', which people would think is paying Gold members. Nobody knows how many are actually paying, although I imagine it's still at least 30m or so due to the f2p games all being locked behind the paywall still.

Imagine how many paying PS+ users there would be if you had to pay for it to play free games, or how many fewer people would pay Xbox if they didn't have to?

Considering next generation, will people still side with Xbox knowing that you need an Xbox Live Gold account for pretty much everything on their console? Out of all the changes and announcements they made to services this generation to try and get back into people's good books, that's the one thing they should have done first yet won't due to how much money it probably brings in.

[FGHFGHFGH]

Yeah like 3 of the top 10 games on live are "free to play"

[Srhalo]

This is exactly it, Microsoft's own actions are killing off Xbox as a console. I'm not going to buy the next console, I already have a PC. I'll just buy a month of gamepass when new games come out if I even want to play them for $5 vs $10 on console and I won't even have to pay for live.

They are betting heavily on streaming but no one wants that. Mobile gamers aren't going to buy into it they just want stuff they can pick up and play for free for 10-15 mins during lunch. And if that's the route Microsoft wants to go i am not interested.

[babadivad]

Not surprising hardware is down. Phil has made it clear he doesn't care if you buy the hardware. I'm starting to be convinced he's a Trojan Horse.

[ACEMANWISE]

Gamers are happy with Xbox Live. In a way that service keeps gamers from buying games all the time.

[ILostMyMind]

You are sadly right.

[hennessey86]

Over 2 billion in gaming revenue, not to bad of you ask me

[Emme]

The fact that MS states such things as "exclusives are not important" and "console hardware sales are not important" shows they are on a dangerous path. Gamepass will reach a saturation point (hello, netflix), and then growth is less and less possible. Exclusives though always drive sales, see Mario Kart, see Smash Bros, see Uncharted, see Spiderman.
Maybe MS can produce exclusives that drive both subscriptions and hardware sales.But they need damn good games for that.

[LordJamar]

When did they state and say those things link please also yeah there working on that multiple studios bought

[Emme]

https://www.kitguru.net/cha...

[Emme]

https://www.google.com/amp/...

[LordJamar]

Just as I thought he didn’t say anything like that so no idea who you are quoting it’s also way out of context

[Emme]

"The business isn’t how many consoles you sell." That are his words, so I get it, You either play dumb or are just trolling,in any case...wasted time.

[LordJamar]

Yeah he didn’t say consoles sales are not important that’s not at all what he said your twisting and lying like a trash politician no idea why you got such a stick up your ass for Xbox but hopefully you get over it I mean you don’t play or own one any way so that’s a start

[StormSnooper]

That’s a huge drop.

[AmUnRa]

48% YoY? Whoow that is much...i know it is almost the end of this generation but that is almost a kick in the n*ts. O well, lets say the Xbox One was a mistake...

[WiiU-Dude]

Don't care. I love my Xbox One. Every PS owner can call it trash. I love it for many reasons. With MS's deep pockets and strategy going forward I don't worry about the Xbox at all.

[AizenSosuke]

I'm convinced that Phil-sama is a Sony agent in disguise.

[RiPPn]

Love what they are doing and I'm actually excited for the brand for the first time in over a decade. Amazing how getting knocked down a peg has made them very pro consumer while Sony heads the opposite direction.

[Artemidorus]

Ditch XBL fees and provide 1st party games and it will be pretty much a winner.