The tech giant has reported results for Q4 2016 and gaming revenue decreased by $152 million for the three months ending June 2016. This is largely due to lower revenue from the Xbox hardware division, writes Wesley Yin-Poole for Eurogamer.net.
Xbox 360 discontinued, revenue rests on Xbox One
As it stands Microsoft does not release exact sales figures for the Xbox One or Xbox 360. However it has discontinued the Xbox 360, which was released ten years ago, and it can be assumed that most of the Xbox hardware revenue is generated by the Xbox One.
Hardware revenue went down by a huge 33%, according to Microsoft. This is largely due to the lower number of consoles sold and the lower price that they sold at.
It looks like the Xbox One is going through a completely understandable sales slump. The figures come after the Microsoft E3 announcement in which the company revealed the smaller Xbox One S and Project Scorpio.
New hardware announcement dampens sales of existing model
The Xbox One S is a smaller version of the high-end console, which will be released in August, while Project Scorpio is a next generation console scheduled to launch sometime in 2017. By the looks of things many people have decided to hold back on buying a new Microsoft console due to the imminent arrival of new hardware.
Microsoft did however announced a boost in revenues from Xbox Live. The number of monthly active users increased by 33% year-on-year to 49 million, while revenue increased 4% thanks to a higher volume of transactions and more revenue per transaction.
The company is now positioning Xbox as a brand for multiple platforms, with a presence on Windows 10 as well as the normal consoles. Microsoft Studios games like Forza Horizon 3, Gears of War 4, Halo Wars 2 and Sea of Thieves will launch on PC in addition to Xbox One. They will also support Xbox Play Anywhere.
The feature means that you can pick up your game on any Xbox One or PC wherever you are. The game will remember your saves and achievements even if you log on from another device.
As a whole Microsoft reported strong results for the quarter, with revenue hitting $20.6 billion and net income $3.1 billion.
Project Scorpio to compete with Sony PlayStation 4.5
It has been announced that Microsoft will continue existing trade in programs for the Project Scorpio console. This will help customers be able to afford the new console and comes as a boost to those who were worried about the financial commitment.
“Some of our retail partners today do trade-in programs and that is definitely going to be partnerships we continue to move going forward. We want to make that transition as smooth as possible,” said Dave McCarthy, general manager of Xbox Services.
The idea is to ensure that the switch to the new console does not mean that players have to leave their old games behind. Compatibility has become a huge deal in the gaming world, as shown by the arrival of Xbox Play Anywhere.
Microsoft is still engaged in a clash of the gaming titans with bitter rival Sony, that recently unveiled the PlayStation 4.5. Microsoft recently invited Sony to merge the online networks for certain games, meaning that users of both consoles would be able to play each other online for the first time.
This would mark a major change in the gaming arena, and fans must be excited about the possibility of playing with a far greater number of people.