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Microsoft gaming revenue increased three percent year-on-year to hit $1.6bn for FY17

jdmonmou

Member
Software sales are up 11% but hardware revenue declined 29%

This figure may well have been higher, however, were it not partly offset by a decline in Xbox hardware revenue. This fell by 29 per cent year-on-year, mostly due to lower prices and a decline in the volume of consoles sold, Microsoft said.

Software sales, meanwhile, were up 11 per cent year-on-year thanks to a higher volume of Xbox Live transactions. Indeed, Microsoft reported that there are now 53m active users on Xbox Live as of Q4 FY17 from 52m in Q3 FY17. That said, it's still down on Q2 FY17's 55m active users.

Link to article:

http://www.mcvuk.com/news/read/xbox-hardware-revenue-down-29-after-fall-in-q4-sales/0184976

Update: Edited to correct mistake in title.Thanks Jarod McChicken.
 
X1S momentum fizzled out pretty fast. The software side is helping keep things somewhat positive but they need to address the hardware problem.
 
Good stuff. I remember reading that the Xbox division was responsible for generating as much as 11% of the company's revenue recently. I believe it was for last year's report.
 

Bsigg12

Member
X1S momentum fizzled out pretty fast. The software side is helping keep things somewhat positive but they need to address the hardware problem.

Having a new, more powerful console announced for Holiday 2017 was going to cause it to slump outside last holiday regardless.
 

Trago

Member
"Everyone's waiting for XBX."

Software side still doing great.

inb4 "Xbox division isn't making mony."
 

Zedox

Member
Here's a better source :)

https://www.microsoft.com/en-us/Investor/earnings/FY-2017-Q4/press-release-webcast

Gaming revenue increased $44 million or 3%, driven by higher revenue from Xbox software and services, offset in part by lower revenue from Xbox hardware. Xbox software and services revenue increased 11%, primarily due to a higher volume of Xbox Live transactions. Xbox hardware revenue decreased 29%, driven by lower prices and a decline in volume of consoles sold.

Gaming revenue increased 3% (up 4% in constant currency) as strength in Xbox software and services offset lower hardware revenue
 

Relix

he's Virgin Tight™
Xbox X will cause a marked increase in hardware sales but I am surprised at the abysmal software they are putting out. Sony is eating them whole. I mean, Forza looks wonderful but I am not a fan of racing games to be honest, and everything else is third party.
 

Savantcore

Unconfirmed Member
Higher software sales is a plus but, well, you'd certainly hope so considering that there have been literally millions more consoles sold in the meantime. Dwindling Xbox Live users should be quite concerning, shouldn't it? Unless I'm misunderstanding.
 

Figments

Member
Xbox X will cause a marked increase in hardware sales but I am surprised at the abysmal software they are putting out. Sony is eating them whole. I mean, Forza looks wonderful but I am not a fan of racing games to be honest, and everything else is third party.

You say abysmal, but software sales have been going up. Enough to offset any hardware decline.
 
There is a mistake in the title, Microsoft gaming revenue for FY17 (July 16-June 17) was in fact 9 billion dollars (1,6 billion is for Q4). Don't ask comparison with previous year, we don't have it !

However, 9 billion dollars is pretty big, in fact it's above EA, Activision Blizzard or Nintendo during the same period. Only one video game company had bigger sales for the last fiscal year, you can guess who (Sony Interactive Entertainment with 14,7 billion dollars).

Gaming revenue for Microsoft includes revenue dollars from Xbox consoles, Xbox Live service, first party games and third party games royalties.
 

Trago

Member
Xbox X will cause a marked increase in hardware sales but I am surprised at the abysmal software they are putting out. Sony is eating them whole. I mean, Forza looks wonderful but I am not a fan of racing games to be honest, and everything else is third party.

Judging by the numbers, third party software matters more, clearly.
 

Relix

he's Virgin Tight™
You say abysmal, but software sales have been going up. Enough to offset any hardware decline.
Well I was going for the "exclusives" argument side of things. This is personal of course but nothing they have (exclusive) for these next months is of any interest to me. Third party is definitely there though.
 

sense

Member
Yes, it will sell to existing hardcore fanbase for three or 4 months just like the xb1s and then they will be back to where they are right now. People are putting too much faith in a $500 hardware that is not a new generation to boot.
 

darkinstinct

...lacks reading comprehension.
Still surprising to see them continue this generation when even the S failed to have a positive impact. What's their goal? At this pace they will end this generation with less than 40 million consoles while Sony will approach 100 million. The US was their one constant but even there they fail miserably now. Even selling less than a supply constrained Switch.

And their 1st party strategy has been bad for years. Have they still not understood that it's best to release your own games from February to August and leave the rest of the year for the heavy hitting multiplatforms?
 

gypsygib

Member
Strongly support cross-platform with PC and my console friends will switch from Playstation. We were on xbox last gen and picked the more power for less money PS4 this gen (then I switched to PC). Like the majority of console gamers, they spend most time playing EA sports (FIFA) and their favourite shooters online together.

Or just allow kb/m on xbox and have separate controller and kb/m lobbies. Any one using a controller on PC/xbox is grouped in the same lobby and vice versa. I can't go back to console after experiencing PC (just love everything about it - upgrades, tweaking, OC, testing, performance, etc,) but it would be great to be able to game with some of my closer friends on console again.
 

Trago

Member
Still surprising to see them continue this generation when even the S failed to have a positive impact. What's their goal? At this pace they will end this generation with less than 40 million consoles while Sony will approach 100 million. The US was their one constant but even there they fail miserably now. Even selling less than a supply constrained Switch.

And their 1st party strategy has been bad for years. Have they still not understood that it's best to release your own games from February to August and leave the rest of the year for the heavy hitting multiplatforms?

Crushing Sony's market leader position isn't top priority here, nor should it be.
 

Elandyll

Banned
Nice. Gaming revenue increasing even without Xbox 1X.
Software revenue and services should pretty much always increase year over year within a gen, because you grow an existing userbase (and now including Gfwl, I mean XBL on Win10). It would take very, very low hw sales and a userbase that stops playing to see a decrease, which would be catastrophic tbh.

Releasing at $499 in the Holidays, I would also be surprised to see the 1X make a big splash, but we'll see.
It'll probably give hw sales a little bump at worst in any case.
 

flkraven

Member
Still surprising to see them continue this generation when even the S failed to have a positive impact. What's their goal? At this pace they will end this generation with less than 40 million consoles while Sony will approach 100 million. The US was their one constant but even there they fail miserably now. Even selling less than a supply constrained Switch.

And their 1st party strategy has been bad for years. Have they still not understood that it's best to release your own games from February to August and leave the rest of the year for the heavy hitting multiplatforms?

lol, you are saying this in a thread about how gaming revenue increased despite a hardware sales decrease. Makes perfect sense haha.

This is during a borderline lame-duck year when the gaming public is aware that Scorpio was coming out.
 

blakep267

Member
Judging by the numbers, third party software matters more, clearly.
Pretty much. Destiny, Battlefront, COD will all have major sales on live and that will increase gaming revenue as well as the increased selling price of the Xbox One X. I wouldn't be surprised if the holiday quarter this year eclipses last year easily
 
Not unless the people waiting are interested only in more powerful hardware.
I think X will perform respectably well but I don't think a huge amount of people are waiting for X. The decline in hardware has more to do with how Xbox usually performs post-holiday.

You say abysmal, but software sales have been going up. Enough to offset any hardware decline.
True, but software also includes Live subs and that is what is being attributed as the main reason for software growth in the OP.
 

Zedox

Member
Still surprising to see them continue this generation when even the S failed to have a positive impact. What's their goal? At this pace they will end this generation with less than 40 million consoles while Sony will approach 100 million. The US was their one constant but even there they fail miserably now. Even selling less than a supply constrained Switch.

And their 1st party strategy has been bad for years. Have they still not understood that it's best to release your own games from February to August and leave the rest of the year for the heavy hitting multiplatforms?

Their goal...to make money...which they are. Sony "beating" them doesn't mean that they can't make money, all it is is more opportunity to sell to users. Your strategy may seem good to you but they have a strategy that seems to be profitable...and I think they are changing part of that strategy next year with their first party releases. Also the S has had a positive impact and it sells well. Also, they aren't looking at just console sales...it's all of their hardware and software (on console and windows), that's what they mean by hardware.

------------------------------------------------------------------------

Also, to those saying the MAU has gone down...yea, it would make sense since there's no big releases for Xbox (plus summer time...) and it's not the first time that the MAU has gown down...but it actually up from the previous year. The highest it's been is 55 million I believe. No matter, it's still crazy that Xbox is making that much money on the amount of users it does have.
 

jelly

Member
I wonder what percentage BC games take in software revenue, those are my purchases this year.

Not sure Xbox One X would have that much effect, it's 500 bucks, the S surge has trailed off and nothing compelling has released to get more users on board. They could also release a black S console.
 

Trago

Member
Not just that and Steam. I can guarentee that's also being counted. But I mean sure people hate it but it's a vocal minority quite a few people I know play on PC for Gears, FH3, etc.

And that number will only increase as more of their heavy hitting first/second party games hit PC.

It's a win-win for them.
 

Blam

Member
And that number will only increase as more of their heavy hitting first/second party games hit PC.

It's a win-win for them.

Exactly and since they own both platforms and they both use Xbox Live. it's still all in their control.
 

Trago

Member
The software part is all software for the platform, not just MS games.

The impact of Windows Store on their game sales is very small.

Hence why I said that third party software matters more.

People seem to be too focused on first party software.
 

conpfreak

Member
They need to invest in more first party titles and partnerships with third party developers. Their current output isn't sufficient complete long term with Sony and Nintendo. People don't think the Switch is a threat to the Xbox One but with the Switch becoming a solid platform for indies and picking off multiplatform games here and there, it will eat a chunk of its market space before they know it.

I'm optimistic though, as the Xbox One S is a solid piece of hardware and they made some very pro-gamer decisions with their backwards compatibility efforts.
 

blakep267

Member
They need to invest in more first party titles and partnerships with third party developers. Their current output isn't sufficient complete long term with Sony and Nintendo. People don't think the Switch is a threat to the Xbox One but with the Switch becoming a solid platform for indies and picking off multiplatform games here and there, it will eat a chunk of its market space before they know it.

I'm optimistic though, as the Xbox One S is a solid piece of hardware and they made some very pro-gamer decisions with their backwards compatibility efforts.
DId you miss E3 where they announced a ton of timed exclusive indie games as well as bigger indie games like PUBG and black desert etc. Nintendo isn't going to eat into that indie share of games from the Xbox.
 
It's safe to assume that they are currently investing more in software.

Problem is that we won't see that closer to release and even then it's a 2-3 year bet.
 

Matt

Member
Hence why I said that third party software matters more.

People seem to be too focused on first party software.
I find this a kinda strange argument to make now when we just had a first half of the year that could serve as a case study in the positive effects a strong exclusive lineup can have on the health of a platform.
 

netBuff

Member
DId you miss E3 where they announced a ton of timed exclusive indie games as well as bigger indie games like PUBG and black desert etc. Nintendo isn't going to eat into that indie share of games from the Xbox.

I don't think the Switch is a serious threat, but is anyone really going wild for timed exclusivity deals like PUBG?
 

blakep267

Member
I don't think the Switch is a serious threat, but is anyone really going wild for timed exclusivity deals like PUBG?
PUBG is going to be big on consoles. Really big. Whether it actually sells boxes or sells to existing users is unknown, but it's going to sell millions more on console. Tons of people don't have capable PCs to be able to play it, so a whole new section is opened up to the game once it becomes available.
 
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