In Microsoft’s latest earning report for the third quarter of fiscal year 2015, the company revealed some unfortunate news for the Xbox. While the Surface did well, bringing in millions for the software giant, the Xbox side of the Devices & Consumer division reported a drop in revenue.
Microsoft reports that the Xbox platform dropped in revenue by 24%. The company claims that the decline in revenue is a result of “lower console units [sold] against prior year post launch quarter and increased mix of lower price Xbox One SKUs”. The good news is that Xbox Live witnessed transactional revenue growth, which was mainly driven by an increase in the number of new Xbox Live subscribers, and existing users making more purchases on the service. Microsoft also notes that revenues generated by its first-party games has increased by a dramatic 49%, mainly due to cross-platform Minecraft sales.
It seems that unbundling the Kinect sensor from the console itself hasn’t done much to improve the numbers, but at least the console itself and the user experience it provides has been generally positive. Microsoft has also been rumored to be preparing a smaller, cheaper, yet more powerful Xbox One, but we are yet to see the device and at this point, we don’t know whether it will positively affect Microsoft’s Xbox revenue numbers.Further reading: Earnings Call, Microsoft, Xbox, Xbox One