Xbox One Sales Decline Affecting Microsoft’s Hardware Revenue

By   /   Jul 20, 2016
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As soon as Microsoft announced Xbox One S and Xbox One Scorpio, many started to speculate that it will surely impact Xbox One sales. Sony Interactive Entertainment’s CEO criticized Microsoft for revealing Xbox One Scorpio too soon, however, Phil Spencer did commented to the criticism. Now Xbox One sales are down, according to Microsoft’s quarterly financials.

Microsoft has reported its financials for the fourth quarter of its 2016 fiscal year. According to the report Microsoft observed decline in revenues to 9 percent, which is $152 million, which is due to low Xbox One sales.

However, Microsoft did not mentioned the sales for Xbox One or Xbox 360, but considering Microsoft discontinued Xbox 360, we can only assume that a bulk of its hardware revenue comes from the sales of Xbox One.

Xbox hardware sales dropped to 33 percent, according to Microsoft this is due to decline in the sales of the consoles and low price of the console. The sales figure reveal that Xbox One is not selling like it used to, which is not a surprise since Xbox One S is due this year and Xbox One Scorpio in Holiday 2017. It seems that announcement of these new consoles have caused some people to wait.

However, on a more brighter side, Microsoft noted that it has gained higher revenues from from Xbox Live during the quarter. Xbox Live monthly users grew 33 percent year over year to 49 million, and revenue from Xbox Live grew 4 percent.

It seems that revenue, in this quarter and following quarter, will increase as many games from Microsoft such as Forza Horizon 3, ReCore, Gears Of War 4 will also release for PC. These games will also support Xbox Play Anywhere feature.

As a whole Microsoft is doing pretty good, as the overall revenue for the quarter was $20.6 billion and net income $3.1 billion.

Xbox One S is coming to storefronts on August 2, the new slimmer version will be available for $399 with 2TB of storage.

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