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Xbox Hardware Revenue Falls 29%, Software Up 11% - VGChartz
Xbox Hardware Revenue Falls 29%, Software Up 11%

Xbox Hardware Revenue Falls 29%, Software Up 11% - News

by William D'Angelo , posted on 21 July 2017 / 7,525 Views

Microsoft has released its Q4 earnings report for the 2017 fiscal year. Gaming revenue increased three percent year-over-year to $1.6 billion. 

Xbox hardware revenue fell 29 percent year-over-year, mainly due to lower prices and lower console sales. Software sales increased 11 percent, driven by increased Xbox Live transactions. 

 

There are now 53 million active Xbox Live users. That is up from 52 million in Q3 2017, but still down from the 55 million in Q2 2017. 

"Our gaming business is now more than $9 billion, and growing profitably," Microsoft's CEO Satya Nadella said during the company's earnings call.

"The gaming world is evolving faster than ever before – from game play across multiple devices, to the explosive growth in streaming and eSports, to new subscription services and mixed reality scenarios. We are uniquely positioned to capture a larger share of this opportunity because of our ability to unite the global community of gamers through Xbox Live – now 53 million strong and growing – and to enable new experiences across PC, console and mobile. Our approach is to let gamers play the games they want, with the people they want, on the devices they want.

"At E3, we celebrated the passion of gamers by introducing the Xbox One X, broadening our portfolio of gaming devices with the world’s most powerful console. We launched two new services that broaden our reach and enrich the gaming experience, both of which are off to a very strong start. Mixer, our new live streaming service, makes it easier than ever before for gamers to create and share across platforms and interact in entirely new ways. Xbox Game Pass is a digital subscription service that expands our existing gaming value proposition.

"In closing, I’m proud of the progress this year – both in our own continued transformation and in how we are empowering customers to digitally transform."


A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel dedicated to gaming Let's Plays and tutorials. You can contact the author at wdangelo@vgchartz.com or on Twitter @TrunksWD.


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12 Comments

barneystinson69 (on 21 July 2017)

Maybe they can make some more first party games? Anybody?


Ganoncrotch (on 21 July 2017)

I almost bought a game for the system a few weeks back, Gears 4 mostly as it came with all previous gears games and it was 12e... then recalled needing to buy an X1 to use it.... and put it back on the shelf, I don't think I could ever justify adding this console to my collection.


  • +2
jason1637 (on 21 July 2017)

You could play Gears 5 on PC.


  • 0
jason1637 (on 21 July 2017)

Gears 4


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Ganoncrotch (on 21 July 2017)

Yeah I know about the cross buy aspect of that, but it was more just the value of getting gears 1/2/3/judgement and 4 for €12 even though I didn't have the console :D would have increased software but done nothing for hardware considering I can't see myself buying it unless really cheap.

I'm a sucker for a deal though....


  • +1
poroporo (on 21 July 2017)

Yeah, they need more games :|


  • +1
Dyllyo (on 21 July 2017)

Seriously. I don't buy a console JUST to play Halo 5 and the new Forza.

They NEED new IPs. Honestly, Scalebound would have persuaded me to get an Xbone, but they opted to cancel it...so yeah, no Xbox for me.


  • +3
jason1637 (on 22 July 2017)

Why would you buy it for just Scalebound? It didn't look that great to warrant buying a whole console for.


  • 0
AngryLittleAlchemist (on 22 July 2017)

Scalebound look better than Halo or Gears. Scalebound looked amazing. I remember buying an Xbox One thinking Quantum Break and Scalebound were going to be new great IPs releasing soon. And look what happened.... To be fair I was sucked in cause the PS4 had like no exclusives(late 2015)


  • +1
jason1637 (on 22 July 2017)

The last demo for scalebound wasnt even running at a stable 30fps... I was looking foward to the game but if i didnt own an XBO i wouldnt buy one for Scalebound. Gears 4 looked way better than scalebound. Gears 4 had a great story and good MP while scalebounds story looked decent and MP was a mess. Halo 5s MP is great and story is meh.


  • -3
AngryLittleAlchemist (on 22 July 2017)

It's all opinion but I think Gears 4 was very disappointing. Also I wasn't talking about graphics but gameplay. I think I'd rather have Scalebound with framerate problems than no Scalebound at all.


  • 0
jason1637 (on 22 July 2017)

What disappointed you about Gears 4? Was it the new cast of characters? But i agree i would have liked scalebound to still come out but only if they fixed the framerate and finished the game.


  • 0
TheCrypticKnight (on 23 July 2017)

Unlikely, you can get almost all their games on other platforms. Not sure why MS has gone down that path.


  • 0
ArchangelMadzz (on 21 July 2017)

You'd think with an install base that grows every day there's no way they could ever have less live users?


Ganoncrotch (on 21 July 2017)

If you have the console, and then you put an inch thick layer of dust on top of it.... then you have 1 less user :D


  • +1
ArchangelMadzz (on 21 July 2017)

And on that same day 15,000 people bought an Xbox One and half of them bought live?

Would you think the rate of dust is larger than the rate of new users? I thought something disastrous would have to happen for that to occur.


  • +3
StuOhQ (on 22 July 2017)

Old players dropping off. People stop paying for Live when they aren't using it anymore. There are a lot of 360 owners who didn't jump over and are now cutting the cord.


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Ggordon (on 21 July 2017)

This year has been kinda rough for xbox though so far only one exclusive that to an rts game came out.Theres cuphead and crackdown 3 but cuphead is also on steam as well so it ll take a while for xbox to get back into the game


Ganoncrotch (on 21 July 2017)

Not to mention the sales drop while it looks like people might be waiting on the true 4k machine which wont be out for another few months the original and S models seem to be dead in the water next to the PS4, 4.25:1 sales in favour of the Sony machine, if that gap continues until the X does launch it would really need to be something special to draw people away from the network where most of their mates will be playing.


  • +1
Ggordon (on 22 July 2017)

Scalebound could ve helped in the growth of xbox especially in japan but it got canned and peoples hopes were lost


  • 0
LethalP (on 21 July 2017)

I imagine the raise in software is due to the bigger install base.


Kerotan (on 21 July 2017)

Been a tough year so far for Xbox.


Azuren (on 22 July 2017)

It's been a tough generation.


  • 0
malistix1985 (on 21 July 2017)

Lets hope this trend continues we need all 3 companies to do well to get the best games :)


DaveTheMinion13 (on 21 July 2017)

So take away Mobile and PC and how many Live users did it gain? Sad they have to fluff their numbers this gen


The_BlackHeart__ (on 21 July 2017)

It's a race against time. Can Microsoft establish a solid XB1X fan-base before the PS5 releases?


Dyllyo (on 21 July 2017)

No. The answer is no. Halo and Forza can't save them forever


  • +1
jason1637 (on 21 July 2017)

Glad to see Xbox doing good.


Azzanation (on 23 July 2017)

Look at the positive side. Software generates more profit than Hardware.


Comments below voting threshold

Dyllyo (on 21 July 2017)

To be fair, sales are only down because Xbox doesn't care about their fan base at all. Lol. They just HOPE the title of "XBOX" is enough to satisfy simple minded American gamers :)


  • -10
Seventizz (on 22 July 2017)

So, this clown trashes a fanbase and an entire country and is totally unmoderated - but say anything negative about sony and you'll get a 14 day ban here.

Yet this site claims to be 'unbiased'?


  • +6
Libara (on 24 July 2017)

The sad state of vgc, it is a pony fest.


  • 0
Random_Matt (on 21 July 2017)

Without Xbox your gaming division would be making more.


  • -10
jason1637 (on 21 July 2017)

Xbox Live Gold makes like 30%-40% of the whole gaming division and that's exclusive to consoles.


  • +8
  • -11
jason1637 (on 21 July 2017)

But still your comment was their ghaming division would be doing better without xhox. Their games sell bad on windows 10 store and they cant compete with steam.


  • +11
Kerotan (on 22 July 2017)

Stuck between a rock and a hard place. Can't compete with steam and can't compete with Sony.


  • 0