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[DanielsM]

Xbox revenue dives as next generation looms in Microsoft Q2 2020 earnings

With the next-generation Xbox Series X on the horizon, Microsoft reports a 21 percent decline in gaming revenue.

www.windowscentral.com

Microsoft dropped Q2 earnings for its 2020 fiscal year today, outlining increased revenue to $36.9 billion, with major growth across Redmond's lineup of products and services. That pairs with a notable downturn for Microsoft's gaming portfolio, reporting a sizeable 21 percent decline in revenue over second-quarter 2019 earnings.

Waning Xbox performance comes as Microsoft readies for next-generation platforms, with Xbox Series X and PlayStation 5 scheduled for launch later this calendar year. That regularly couples with reduced investment from consumers, as internal efforts steady shift toward the upcoming decade of Xbox and supporting gaming services.

Microsoft also reports an 11 percent decline in Xbox content and services revenue, spanning supporting Xbox titles, subscriptions, and other fundamental components of the Xbox ecosystem. It attributes the year-over-year drop to Fortnite, listed as an unnamed "third-party title," which saw record-breaking success throughout 2019. The free-to-play battle royale saw content revenue surge parallel to its peak, drawing millions of players with deep-rooted monetization.

Xbox Q2 revenue sinks 21% as Microsoft reloads for next gen

Microsoft's Xbox Q2 revenues were down 21% because hardware is selling slower and Fortnite is no longer a phenomenon. But subscriptions are still strong.

venturebeat.com

 

[Mista]

At least make a proper thread ffs. Here:

Microsoft dropped Q2 earnings for its 2020 fiscal year today, outlining increased revenue to $36.9 billion, with major growth across Redmond's lineup of products and services. That pairs with a notable downturn for Microsoft's gaming portfolio, reporting a sizeable 21 percent decline in revenue over second-quarter 2019 earnings.

Waning Xbox performance comes as Microsoft readies for next-generation platforms, with Xbox Series X and PlayStation 5 scheduled for launch later this calendar year. That regularly couples with reduced investment from consumers, as internal efforts steady shift toward the upcoming decade of Xbox and supporting gaming services.

Microsoft also reports an 11 percent decline in Xbox content and services revenue, spanning supporting Xbox titles, subscriptions, and other fundamental components of the Xbox ecosystem. It attributes the year-over-year drop to Fortnite, listed as an unnamed "third-party title," which saw record-breaking success throughout 2019. The free-to-play battle royale saw content revenue surge parallel to its peak, drawing millions of players with deep-rooted monetization.

 

[Imtjnotu]

Microsoft is up and Xbox is down.... Next gen csnt come soon enough

 

[mejin]

Today, Microsoft announced its financial results for the second quarter of the fiscal year 2020, , related to the period between October 1 and December 31.

Microsoft Gaming Revenue Drops 21% Year On Year; Xbox Content & Services Down 11%

Today, Microsoft announced its financial results for the second quarter of the fiscal year 2020, , related to the period between October 1 and December 31.

twinfinite.net

While a recent relevant change in the way Microsoft reports its metrics excludes absolute revenue for gaming and other specific business fields (on top of Xbox Live monthly active users) from the main documents, the form 10Q includes more details. We learn that the revenue for gaming was 3,327 million dollars, compared to 4,232 million earned during the same quarter last year.

We also learn that Xbox hardware revenue decreased 43% year-on-year, primarily due to a decrease in volume and price of consoles sold.

 

[MoreJRPG]

This isn’t a surprise to anyone. Sony’s down too. Gamespot Is hemorrhaging. The only system keeping the industry afloat right now is Nintendo. Everything’s taken a nose dive until next gen.

 

[DanielsM]

Microsoft is up and Xbox is down.... Next gen csnt come soon enough

The services were suppose to be going up i.e. no gens. If all the Xbots were right, you would be seeing content and services continue to go up by double digit percentages, if not multiple times as the service revenue grows.

FY20 Q2 - Press Releases - Investor Relations - Microsoft

www.microsoft.com

(here is the press release)

 

[Mista]

Yes yes very shocking wow oh em gee

Xbox revenue dives as next generation looms in Microsoft Q2 2020 earnings

https://www.windowscentral.com/xbox-revenue-dives-next-generation-looms-microsoft-q2-2020-earnings Microsoft dropped Q2 earnings for its 2020 fiscal year today, outlining increased revenue to $36.9 billion, with major growth across Redmond's lineup of products and services. That pairs with a...

www.neogaf.com

 

[Bryank75]

MS has loads of money for Xbox to lose, people keep telling me! /S

 

[Clear]

Seems even chucking the digital-only SKU out at rock-bottom prices failed to move the needle for MS.

 

[DanielsM]

news

news

www.gamasutra.com

Revenue for Microsoft’s video game business is down 21 percent year-over-year at the close of the second quarter of FY 2020, a decline the company blames both on slowing hardware sales and a tough comparison against a stronger-than-usual Q2 (driven by an unnamed third-party title) back in FY 2019.

All in all, Microsoft’s game revenue decreased $905 million for the quarter ending December 31, 2019. Revenue from Xbox hardware sales alone fell 43 percent year-over-year, a decline Microsoft chalks up to a decrease in both the number of consoles being sold and lowering prices of Xbox systems.

Xbox content and services fell $295 million year-over-year, or by 11 percent. Microsoft says growth in its own subscription services (likely Xbox Game Pass) helped offset a decline caused mostly by the fact that an unnamed third-party title set the bar high during the same quarter last year.

In terms of revenue, the “More Personal Computing” category that houses Microsoft’s game business (alongside the likes of Windows, search advertising, and Surface revenue), came in at 13.2 billion for the quarter, up from $13 billion year over year.

 

[it_wasn't_me]

Shit. Isn't Xbox up YOY? People told me that Xbox is up YOY according to their sales estimates.

 

[mckmas8808]

Is it the $1 Gamepass that's hurting MS?

 

[Bryank75]

Is it the $1 Gamepass that's hurting MS?

I always said it isn't a sustainable model... once they get enough people in the door, the price will go up and content down.

 

[mejin]

news

news

www.gamasutra.com

Revenue for Microsoft’s video game business is down 21 percent year-over-year at the close of the second quarter of FY 2020, a decline the company blames both on slowing hardware sales and a tough comparison against a stronger-than-usual Q2 (driven by an unnamed third-party title) back in FY 2019.

All in all, Microsoft’s game revenue decreased $905 million for the quarter ending December 31, 2019. Revenue from Xbox hardware sales alone fell 43 percent year-over-year, a decline Microsoft chalks up to a decrease in both the number of consoles being sold and lowering prices of Xbox systems.

Xbox content and services fell $295 million year-over-year, or by 11 percent. Microsoft says growth in its own subscription services (likely Xbox Game Pass) helped offset a decline caused mostly by the fact that an unnamed third-party title set the bar high during the same quarter last year.

In terms of revenue, the “More Personal Computing” category that houses Microsoft’s game business (alongside the likes of Windows, search advertising, and Surface revenue), came in at 13.2 billion for the quarter, up from $13 billion year over year.

Fortnite? LOL

That's the winning formula Sony wants to pursue?

 

[jakinov]

MS has loads of money for Xbox to lose, people keep telling me! /S

Declining doesn't necessarily mean they are losing money. The overall business is likely still profitable.

 

[CeeJay]

MS must be shitting themselves with those disastrous gaming business figures. Quick everyone sell your Xbox before it's worthless and invest the money in Stadia instead

 

[a multicultural team of v]

Sony’s down too.

Sony reports next Tuesday.

 

[DanielsM]

Declining doesn't necessarily mean they are losing money. The overall business is likely still profitable.

There is absolutely no information that Xbox as a product/service every was a ROI, most of the information at least through about 2014 suggested they lost mega per year. Its very possible MS doesn't know other than rough guess depending on how calculations are done and collected.

Sony reports next Tuesday.

I expect a hit across the board.


The issue with MS is service revenue is not very much and not really growing. Probably why hide the MAU(?)

 

[Vawn]

MS has loads of money for Xbox to lose, people keep telling me! /S

And Xbox continues to uphold their end of the bargain.

 

[it_wasn't_me]

This isn’t a surprise to anyone. Sony’s down too. Gamespot Is hemorrhaging. The only system keeping the industry afloat right now is Nintendo. Everything’s taken a nose dive until next gen.

Well, fact is, Switch is in the middle of its lifespan. PS4 and Xbone both are near end. Regarding PS4, it's not even a PS4's worst year. In 2014 PS4 has sold 14.3 m units. Being able to sell 14.4 mil. in 2019, so late, near end of the gen, into the lifecycle with next gen already announced shows that there is still demand for PS4 especially under 299. Xbox can only dream.

 

[CJY]

Phil Spencer: Xbox Game Pass isn’t “burning money to gain customers”

https://stevivor.com/features/interviews/phil-spencer-xbox-game-pass/ At X019 in London late last year, Spencer admitted to Stevivor that Microsoft has “been a little bit opaque [about] how many subscribers” the subscription service has, but that it’s “a good business” for the company...

www.neogaf.com

Really?

Maybe they're burning money and not gaining customers.

 

[GHG]

Microsoft also reports an 11 percent decline in Xbox content and services revenue, spanning supporting Xbox titles, subscriptions, and other fundamental components of the Xbox ecosystem.

This is probably a slight cause for concern for them, especially with how much they've been pushing gamepass.

While not specific to gamepass because it includes other subscriptions such as Live, it would point towards there being retention issues. Even if you aren't selling as much hardware as before at this stage of the generation (as expected), you at least want to retain those who you did previously have on board.

 

[it_wasn't_me]

"We also learn that Xbox hardware revenue decreased 43% year-on-year, primarily due to a decrease in volume and price of consoles sold. "

This is good for Xbox. Similar results in last 2 years also. Don't you think? Poised to dominate

 

[DanielsM]

"We also learn that Xbox hardware revenue decreased 43% year-on-year, primarily due to a decrease in volume and price of consoles sold. "

This is good for Xbox. Similar results in last 2 years also. Don't you think? Poised to dominate

I have sales at 4.8m units for 2019 vs 6.8m units for 2018, of course this is a YoY (quarterly) revenue number of 43% drop not a unit number... sounds about right what I expected.

The issue is "services", they now hide the MAU and they have services mixed in with content sales... basically no real information at all.

 

[jakinov]

There is absolutely no information that Xbox as a product/service every was a ROI, most of the information at least through about 2014 suggested they lost mega per year. Its very possible MS doesn't know other than rough guess depending on how calculations are done and collected.

They don't release all the details but the CEO said the business was profitable which comes from a guy who reportedly wanted to gut and sell the business when he became CEO. A decline probably won't break them but we don't know for sure which is why I didn't use definitive language. There are also quarters in the last while where they grew. Neither necessarily means they grew or shrunk profit margins significantly. Whether or not they lost so much for so many years these profits never really benefit all the money they've been putting in, I don't know, but I would think they would have given up already if that were the case; considering the CEO was not a huge fan of the business.

 

[Shin]

Yes yes very shocking wow oh em gee

It's funny because of who both posters are
Business as usual

 

[M1chl]

Would be better to see profits, if we are posting revenue about division of Trillion dollar company.

 

[DanielsM]

They don't release all the details but the CEO said the business was profitable which comes from a guy who reportedly wanted to gut and sell the business when he became CEO. A decline probably won't break them but we don't know for sure which is why I didn't use definitive language. There are also quarters in the last while where they grew. Neither necessarily means they grew or shrunk profit margins significantly. Whether or not they lost so much for so many years these profits never really benefit all the money they've been putting in, I don't know, but I would think they would have given up already if that were the case; considering the CEO was not a huge fan of the business.

Microsoft does not calculate profits per product/services, general speaking, see their financials.

Growth is growth, if you say you are growing revenue, you are growing revenue. If you say you are growing profit margin, you are growing profit margin. (etc)

but I would think they would have given up already if that were the case; considering the CEO was not a huge fan of the business.

I seriously doubt anyone at Microsoft could tell you how much they lost in the thing called Xbox, former executives just throw out numbers.... rough estimates of past losses... they really have no idea because they don't calculate them.... just rough estimates.... nothing official other than napkin figures.

People could surmise potential losses before, meaning they were stacking Xbox in with outer stuff that could be pulled out of the equation, now they basically hide everything.

(just an example, maybe not the full truth, but maybe close enough)

The Escapist : Forums : The News Room : Microsoft Loses $2 Billion Per Year On Xbox, Analyst Says

The mouthpiece of the gaming generation, The Escapist aims to capture and celebrate the contemporary video gaming lifestyle and the diverse global video game culture by way of in-depth features, thought provoking articles and relevant columns authored by leading video game authorities, as well...

www.escapistmagazine.com

Bill Gates to Microsoft: Spin Off Xbox If You Want, Don't Sell Bing

Bill Gates to Microsoft: Spin Off Xbox If You Want, Don't Sell Bing

mashable.com

Of course, I have no idea how they could spin-off Xbox, it a money pit and would have collapsed as soon as it was spun off.

 

[Mista]

It's funny because of who both posters are
Business as usual

I know right?

 

[Metnut]

Are comparable numbers released yet from Sony?

 

[MoreJRPG]

Sony reports next Tuesday.

They’ll be down. The gens over and there was no killer app last year. They’ve lost every single NPD to Nintendo last year by a large margin.

 

[Jigsaah]

The services were suppose to be going up i.e. no gens. If all the Xbots were right, you would be seeing content and services continue to go up by double digit percentages, if not multiple times as the service revenue grows.

FY20 Q2 - Press Releases - Investor Relations - Microsoft

www.microsoft.com

(here is the press release)

Gamepass isn't ready yet. They just did another $1 subscription push. I wonder how long they are going to keep this up before they take the training wheels off.

 

[StreetsofBeige]

The services were suppose to be going up i.e. no gens. If all the Xbots were right, you would be seeing content and services continue to go up by double digit percentages, if not multiple times as the service revenue grows.

FY20 Q2 - Press Releases - Investor Relations - Microsoft

www.microsoft.com

(here is the press release)

Another great MS pisser thread by DanielsM.

 

[DanielsM]

Gamepass isn't ready yet. They just did another $1 subscription push. I wonder how long they are going to keep this up before they take the training wheels off.

I don't see it happening, meaning a real business model... coming up on 3 years now for Game Pass. Of course, they won't show any of the figures for it.

They'll probably say at some point they have 5m users but won't say how many paid actually real to God money for it over a buck, or the average month revenue per user.

 

[it_wasn't_me]

Gamepass isn't ready yet. They just did another $1 subscription push. I wonder how long they are going to keep this up before they take the training wheels off.

Game Pass is almost 2 and a half years on the market. It's more than ready. They just did another 1$ sub. push? LOL, It is like that since E3 2019, regarding Ultimate

 

[Jigsaah]

Game Pass is almost 2 and a half years on the market. It's more than ready. They just did another 1$ sub. push? LOL, It is like that since E3 2019.

not everyone qualified for the $1 E3 2019 push if you didn't grab it right then and there. They did in fact do another push for people who missed out. Believe it or not...not everyone pays $1 for the service. I know, I subscribed originally for full price.

 

[it_wasn't_me]

not everyone qualified for the $1 E3 2019 push if you didn't grab it right then and there. They did in fact do another push for people who missed out. Believe it or not...not everyone pays $1 for the service. I know, I subscribed originally for full price.

Even before E3 2019 there was quite often 1-2$ deals for GP Ultimate

 

[Jigsaah]

Even before E3 2019 there was quite often 1-2$ deals for GP Ultimate

"Quite often" does not equal always.

 

[DanielsM]

They’ll be down. The gens over and there was no killer app last year. They’ve lost every single NPD to Nintendo last year by a large margin.

I expect Sony to be down 10-20% across the board this quarter in PS, about normal for this part of the cycle. Nintendo had a very good year, good solid year for Sony for year 6... selling decent and no huge sales yet..... motherfuckers are still selling for $250-300 with bundles

I have Sony at just over 14m units for 2019, so probably a 15-20% hardware revenue reduction for the whole year... I don't know about quarterly YoY.... I don't calculate that.

 

[it_wasn't_me]

"Quite often" does not equal always.

Quite often means every god damn month or probably every month. That's quite often for 1 month sub. Before Ultimate there was probably every damn month Game Pass for 1$.

April 2018

Xbox Game Pass: State of Decay 2, Pro Evolution Soccer 2018, Overcooked, and More Coming in May - Xbox Wire

Hello, fellow gamers! Welcome to your May Xbox Game Pass update. We’re incredibly excited to bring State of Decay 2 to Xbox Game Pass members on May 22, the same day as its global release, as we continue to build our commitment to deliver the ultimate gaming membership for our fans. We’re also...

news.xbox.com

May 2018

Get Xbox One Game Pass For $1, Includes State Of Decay 2

Get access to over 100 Xbox One games, including recent exclusives like Sea of Thieves, for just $1.

www.gamespot.com

June 2018

Microsoft Store Coupon: Save 80% Off With August Promo Codes | 2021 Deals & Discounts

Use today's limited 80% off Microsoft promo codes and coupons. Find trending discount codes on all your favorite games, software and productivity apps.

slickdeals.net

and so on

 

[HarryKS]

They’ll be down. The gens over and there was no killer app last year. They’ve lost every single NPD to Nintendo last year by a large margin.

You work at Goldman Sachs?

 

[LordPezix]

Let me help everyone here by posting what really matters.

· Net income was $11.6 billion and increased 38% GAAP and 36% non-GAAP

Nice bump in share price, aaannnndddd the world carries on.

 

[TGO]

Expected.

 

[DanielsM]

Let me help everyone here by posting what really matters.

· Net income was $11.6 billion and increased 38% GAAP and 36% non-GAAP

Nice bump in share price, aaannnndddd the world carries on.

For a particular product or service that isn't all that matters, not at all. You probably have a couple thousand Stadia staying up every night hoping their service doesn't go dark.

Google Notice: You will receive a refund for the current month service fee and any credit you may have. We appreciate your participation in our program. We suggest you contact the publisher for the games you purchased for additional guidance, if any.

 

[StreetsofBeige]

Let me help everyone here by posting what really matters.

· Net income was $11.6 billion and increased 38% GAAP and 36% non-GAAP

Nice bump in share price, aaannnndddd the world carries on.

Exactly.

After hours it's spiking even more to an all time high of $176/share at $1.3 trillion market cap.

Sony is at $72/share at a $87 billion market cap. If you bought SNE stock during the dotcom bomb out, you'd still be down as shares hit $120 back then and then cratered for 15 years. When SNE stock bottom out around 2012-2013, Yoga pant seller Lululemon was worth more as a company.

 

[onQ123]

But isn't this pretty much normal for the year before a new generation?

 

[it_wasn't_me]

But isn't this pretty much normal for the year before a new generation?

Depends. Xbone aren't in steady decline for console which have a normal sales throughout whole gen, like PS4 and Switch.

This is steady decline in sales, expecting the same for Switch will happen in 2022.

 

[jakinov]

Microsoft does not calculate profits per product/services, general speaking, see their financials.

Growth is growth, if you say you are growing revenue, you are growing revenue. If you say you are growing profit margin, you are growing profit margin. (etc)



I seriously doubt anyone at Microsoft could tell you how much they lost in the thing called Xbox, former executives just throw out numbers.... rough estimates of past losses... they really have no idea because they don't calculate them.... just rough estimates.... nothing official other than napkin figures.

People could surmise potential losses before, meaning they were stacking Xbox in with outer stuff that could be pulled out of the equation, now they basically hide everything.

(just an example, maybe not the full truth, but maybe close enough)

The Escapist : Forums : The News Room : Microsoft Loses $2 Billion Per Year On Xbox, Analyst Says

The mouthpiece of the gaming generation, The Escapist aims to capture and celebrate the contemporary video gaming lifestyle and the diverse global video game culture by way of in-depth features, thought provoking articles and relevant columns authored by leading video game authorities, as well...

www.escapistmagazine.com

Bill Gates to Microsoft: Spin Off Xbox If You Want, Don't Sell Bing

Bill Gates to Microsoft: Spin Off Xbox If You Want, Don't Sell Bing

mashable.com

Of course, I have no idea how they could spin-off Xbox, it a money pit and would have collapsed as soon as it was spun off.

Just because they don't publish them, doesn't meant hey don't calculate it out. The major company I work for shows all kinds of data internally but they don't publish them when it comes time to earnings because investors don't expect them to. From what I've seen, big companies love data and they are even willing to spend a shit ton of money to collect and calculate it all. I assume Microsoft eats their own dog food and uses all the technologies they sell to other companies to get insights into their own financials. Growth is growth but Microsoft doesn't talk about profitability of individual businesses. The guy in the article is only an analyst, it's just what he thinks; the only people who do (or don't know) would be Microsoft themselves. They could be hiding things and not be profitable.

Our gaming business now is more than $9 billion and growing profitably. The gaming world is growing faster than ever before from gameplay across multiple devices, to the explosive growth in streaming and eSports, to new subscription services and mixed reality scenarios…We launched…new services (Mixer and Xbox Game Pass) to broaden our reach and enrich our gaming experience, both of which are off to a very strong start.

The statement is a bit ambiguous and nobody clarified but it seems to say they are profiting business. I also think that since the CEO who was again known for wanting to get rid of the business but not only stuck with it but increased his investment (acquiring studios) that the business is probably not bleeding 2 billion a year. The current CEO has shutdown or sold various businesses since he started; I don't see why he'd be afraid to shut this business down if has been performing so poorly once he actually got the power to do it.

 

[Rolla]

The damage control seems to be that GP subscriptions are up but where I live GP has always been free entry for the first 1-3 months?

This report is abysmal.

 

[it_wasn't_me]

Funny thing is MS said that they won't give specific hardware sales numbers anymore, instead, they will report MAU numbers which are more important for them. Now, for couple of Q reports now, they don't report MAU numbers either. What happened?