Microsoft Corporation’s Gaming Revenue Down 9% Due to Low Xbox Hardware Sales

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New report shows Xbox sales have been in a decline past quarter

Microsoft Corporation (NASDAQ:MSFT) released earnings report for fiscal year 2016 Q4. The report has revealed interesting details about Microsoft’s gaming division and how it fared through the last quarter.

The report states that gaming revenue fell by 9%, making up for a $152 million decrease in revenue. Microsoft has attributed the decline to lower Xbox hardware sales which decreased by 33% due to lower consoles sold and lower prices of consoles sold. On the other hand, Xbox Live revenue saw an increase by 4% due to higher number of transactions and revenue per transaction. Xbox Live’s monthly active users grew by 44% to 49 million during the same period compared to last year.

Microsoft has once again not reported individual sales of Xbox One and Xbox 360. For all we know, the decline could largely be in part of Xbox 360. Since the console is now over 10 years old, it is only natural that year-on-year interest will gradually decrease. Xbox One could be facing some decline as well due to the upcoming Xbox One S rumors (now confirmed) which began months ago. Microsoft is also planning an Xbox One model dubbed “Project Scorpio” which is essentially a much more powerful version of the existing system. The new console is aimed at bringing native 4K gaming and is officially scheduled to arrive in holiday season of 2016.

Xbox hardware sales are much likely to increase during Q4 2016 due to a number of first-party game releases such as Forza Horizon 3, Gears of War 4 and ReCore. The new price cut and slim revision are also going to reflect renewed interest in the next earnings report.

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