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Xbox One Hardware Revenue Dropped 48% Last Quarter - VGChartz
Xbox One Hardware Revenue Dropped 48% Last Quarter

Xbox One Hardware Revenue Dropped 48% Last Quarter - News

by William D'Angelo , posted on 01 August 2019 / 3,371 Views

Microsoft has announced its earnings result for the fourth quarter of fiscal year 2019, which ended on June 30. Microsoft for the quarter reported GAAP revenue of $33.72 billion and net income of $13.19 billion. 

"It was a record fiscal year for Microsoft, a result of our deep partnerships with leading companies in every industry," said Microsoft CEO Satya Nadella. "Every day we work alongside our customers to help them build their own digital capability - innovating with them, creating new businesses with them, and earning their trust. This commitment to our customers’ success is resulting in larger, multi-year commercial cloud agreements and growing momentum across every layer of our technology stack."


Xbox hardware revenue dropped 48 percent for the quarter year-on-year, while gaming revenue as a whole declined 10 percent to $2.05 billion. Xbox software and services declined three percent against a strong quarter a year ago. This was partially offset by subscriptions growth.

The number of Xbox Live monthly active users increased 14 percent to 65 million. 


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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56 Comments

Cerebralbore101 (on 19 July 2019)

Xbox is quickly becoming the 3rd wheel of gaming. A PC, PS4, or Switch are all better platorms than Xbox. Xbox only really keeps pace with the PS4 in the USA. In most other markets it loses badly to the PS4 in sales. Even Nintendo is going to surpass the XB1's lifetime sales this year.


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Cerebralbore101 (on 20 July 2019)

Lol you think I have an Xbox?


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Ganoncrotch (on 19 July 2019)

That's not even circling the drain anymore, that's just done.


Ronster316 (on 19 July 2019)

Soon to be dead last, well deserved too, the amount of games now that are just coming out on NS & PS4, or NS, PS4 and PC but no X1 release is astonishing. Glad i jumped ship, Microsoft are done.


Cerebralbore101 (on 19 July 2019)

Yeah PS4 has 30-40% more AAA games rated 80% or higher, than XB1. There's way too many PS4/PC titles that don't have XB1 versions. This isn't surprising though. MS doesn't bother with games unless they think they will sell over 500,000 units. Japanese devs often skip MS entirely, because MS doesn't have a console presence in Japan.

Switch may still have less games than XB1, but it has made itself unique with the portability, and exclusive games. Nothing MS has done makes the XB1 stand out, or unique.


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Cerebralbore101 (on 19 July 2019)

Yeah PS4 has 30-40% more AAA games rated 80% or higher, than XB1. There's way too many PS4/PC titles that don't have XB1 versions. This isn't surprising though. MS doesn't bother with games unless they think they will sell over 500,000 units. Japanese devs often skip MS entirely, because MS doesn't have a console presence in Japan.

Switch may still have less games than XB1, but it has made itself unique with the portability, and exclusive games. Nothing MS has done makes the XB1 stand out, or unique.


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method114 (on 19 July 2019)

Yep I loved my Xbox 360 but I jumped ship to PS4 and thank god I did.


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Mr Puggsly (on 21 July 2019)

I think you're ignoring all the AAA games that are X1, PS4 and PC only.


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Sixteenvolt420 (on 20 July 2019)

MS have lost touch with gamers and don't release anywhere near enough exclusives. They focused more of watching tv and such than they did games this gen. It's no wonder that they are so far behind this gen in console sales.


Mr Puggsly (on 21 July 2019)

Do you feel MS buying multiple studios is an effort to address that opinion you have?


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Sixteenvolt420 (on 21 July 2019)

For next gen, hopefully.


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method114 (on 22 July 2019)

Yea that's why they have all those studios. Problem is there is no reason for me to go back now. Sony has been perfect this gen I see no reason to leave backwards compatibility, trophies, and series that I have fallen in love with. With my gaming I'll just play whatever they release on there.


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Hiku (on 19 July 2019)

Would be interesting to know what software pushed sales during the same period last year. I think Fortnite was one of them.


Ganoncrotch (on 19 July 2019)

doubt that would have had the same impact last year on the X1, considering that on the X1 free to play games like Fortnite and paladins all require you have xbox live gold, on both Switch and the PS4, free to play games are free... to play, you don't need to pay a 50e subscription to play those titles which makes them cheaper by a large degree.


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Mr Puggsly (on 21 July 2019)

@Ganoncrotch - Your comment is irrelevant. He's simply suggesting the Fortnite marketing may have some impact, the average consumer may not be aware of subscription requirements.

It could be a number of reasons people still buy Xbox. Such as exclusives, interest in subscription services like Game Pass, maybe people just want to have the same console as a friend/family. So in the next gen they need to lean into having more exclusives than previous gens and push Game Pass as a bargain in the industry. At least encourage people to have it as a secondary console.


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ClassicGamingWizzz (on 20 July 2019)

Let it BE a lesão for them that they probably Will never learn that people want the fucking games, big juicy games, them tasty new IPs and not the same old shit but even worse. The same old IPS in the same style is getting old and people is bored . After they picked halo and gears and Starter doing it themselfs it was just not the same quality. Nintendo is always trying to inovate with the same IPS to make hings interesting, Sony always pumping new IPs on diferente genres from their studioa and give them freedom If they prove themselfs. Ex Microsoft bought the studio that maked single player focused games with great combat , What is the game they show this E3 ? A fucking Shooter lol Dont remember even the name of it cause they all look the same thing.


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KLAMarine (on 19 July 2019)

Software revenue is more important.


Oneeee-Chan!!! (on 19 July 2019)

Profit (revenue - cost) is most important.


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Ashadelo (on 19 July 2019)

I picked up the fortnite bundle, got an extremely good deal. It seems like a lot of people don't like Xbox One, especially on this site. :( Hope they do better in the future. With that said.... This is my first console this generation, and I actually really really really like my Xbox One S. As long as I can play games like Final Fantasy, Metal Gear, Halo, Crash Bandicoot, etc I am pretty much set. I know Microsoft doesnt have the first party titles like Nintendo or PS has been building up, so we will have to see what happens next generation.


GoldenHand80 (on 20 July 2019)

That's the problem. Microsoft seems to be desperately waiting for next generation to come, they've been waiting for it for years. They're desperately waiting for next generation that they're not making any efforts to make good exclusive games or anything that would make people interested in their platform. Microsoft believes that it's too late to make any effort. When next generation Xbox is released they will probably dump support of xb1 really fast which could be a good thing. But by doing that they might piss off many customers and more people will migrate to other platforms. It is a really tricky situation for Microsoft thanks to Don Mattrick and his team look how much damage they did to Microsoft from just one or two press conferences.


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Azzanation (on 20 July 2019)

@Ashadelo Best advice I can give you is just ignore the masses on this site. If you enjoy the games than play what you enjoy. Xbox S and X are very solid systems. I am mainly a PC gamer but I do enjoy my Xbox X in the living room with the ability to play Xbox games on my PC which comes in handy. the X1 is also a superior version to the 360 in BC so all your old games count as well. Sales don't make games better. In fact consoles like the DreamCast and GameCube are some of the best consoles iv played and they all undersold. Consider the X1 in a similar boat. Gears 5, Battletoads, Ori Will of the Wisps and Halo Infinite are just around the corner.


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GoldenHand80 (on 20 July 2019)

Xbox 1 exclusives are absolutely pathetic. When Sony made Uncharted 4, God of War, Horizon Zero Dawn, Spiderman and Days Gone and making death stranding, the last of us part 2 ...etc and many more great exclusives. Xbox gave the fans crackdown 3 and sea of thieves to compete with all tv3 above.


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Azzanation (on 20 July 2019)

@Ashadelo As you can see, the poster above is exactly my point. The site is full of them. They don't understand individual preferences and majority like to compare apples to oranges. Most posters haven't even played the games they are so willing to shoot down because of physical sales or launch day reviews. If you love the games you mentioned than all power to you. Halo is definitely a franchise to stick around for and Infinite is looking set to be a great experience.


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GoldenHand80 (on 20 July 2019)

No. As a matter of fact those XB fanboys who keep blindly defending every bad decision Phil Spencer and his team are making are the ones who brought Xbox to this miserable situation. If those fanboys said from the beginning that they're not OK with things like crackdown 3, sea of thieves and Xbox SAD that would have made MS rethink their strategy and put more effort to try to compete with Sony and Nintendo. Now they're just in constant fight for survival with declining sales. It won't even catch up with xb360 lifetime sales. And you probably won't see that halo infinite this generation, it Will a project Scarlett launch title so yeah stick with your xb1 until XB Scarlett is released to play Halo infinite


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Azzanation (on 20 July 2019)

@Golden Who cares about sales, if you enjoy the games it shouldnt matter about how well a game or consoles sells especially in a digital world where these charts dont include them. Phil is doing a great job. Words of advice, A console doesnt have to be top selling to be enjoyed.


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GoldenHand80 (on 20 July 2019)

There is a reason why ps4 sold 97 million and XB sold less than half of that and it's dropping 48%. The best games are multiplatform whereas the best Nintendo switch and ps4 games are exclusive games. So yeah Xbox sucked this generation but whatever.


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GoldenHand80 (on 23 July 2019)

You don't need to be a genius to know that good games sell better than average and bad games. High quality games drive hardware sales. When a console is selling well is mainly because of its quality game library especially exclusive ones that can only be played on that console which is exactly why Nintendo switch and PS4 are selling better than XB.


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VAMatt (on 20 July 2019)

Those dropa are big, but I don't know that they're really out of line with what would be expected at the end if the generation. The 14% growth in XBL is also big, considering how few people are coming into the console family. I'd like to better understand how that works.... I'd also like to see Gamepads numbers.


Mr Puggsly (on 19 July 2019)

Sales are definitely declining but its also a platform hugely dependent on holiday sales. Its always selling low outside of that. Also, while Switch is selling way ahead of Xbox. Studios use Xbox to sell games that simply don't do as well on Switch or won't be ported to Switch. This is partly why MS supports Switch, that aren't direct competitors.


Hiku (on 19 July 2019)

I don't think the news here is that it is "selling low outside of holidays", but that there is a 48% drop YoY compared to the same period last year.


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Mr Puggsly (on 21 July 2019)

Again, sales are declining and new consoles coming aren't helping. Frankly, I'm somewhat concerned of the Xbox's future, I hope their next platform can sell 40+ million again. But sharing games with other platforms will be good for software revenue regardless.


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Angelv577 (on 20 July 2019)

Xbox is becoming primarily a service console.


Comments below voting threshold

Azzanation (on 19 July 2019)

Subscritions is there focus and thats what there achieving. Software over Hardware, its where the money is. Next gen expect even lower console numbers.


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HylianSwordsman (on 19 July 2019)

Honestly the fascinating thing about Microsoft is that they're no longer software over hardware, they're services over software or hardware. Note that the one thing up for them right now is their subscription service. Xbox Live monthly users are up as well. It's their services that they've been known for, for a long time now. It's why we're hearing rumors that Xbox Live or Game Pass might come to Switch. Even Windows is going to a service model. Microsoft and Xbox are going in the direction more and more of defining themselves by services, not software, and definitely not hardware.

Quite frankly, I think it's working. Xbox is the unquestioned leader on services, pretty much always has been, but now more than ever. I've said it before, but they could just stop making hardware altogether and sell their services on other platforms and they'd still make tons of money and be a major player in the industry. Of course, making games to support their services is still always going to be good for them, so software definitely still matters, it's just not actually the real moneymaker, but rather the services.


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Barkley (on 20 July 2019)

Microsofts gaming revenue for the quarter: $2.06 Billion
Playstations gaming revenue for the quarter: $4.62 Billion

When this services focus starts bringing in as much money let me know.


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VAMatt (on 20 July 2019)

Revenue is not the important number either. Services (generally) have higher margins than even software, which has much higher margins than hardware.


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FloatingWaffles (on 20 July 2019)

@Barkley

That's a very dishonest and misleading comparison. The PS4 has almost a 100m userbase compared to Xbox One's 40m (?) and has outsold the Xbox One over 2:1 this entire gen, there was literally no way it wasn't going to make more revenue than the Xbox this quarter. You expect Microsoft's service push with things like Game Pass, which has still just barely been expanding for the past year and a half (they barely released the PC version of Game Pass last month....) to somehow be able to not only cover that gap at all, but this quickly?


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COKTOE (on 21 July 2019)

@FloatingWaffles. Azzination has been beating this very stupid drum for around 2 years now. Although the wording has changed from what it was originally: "Console sales don't matter" AN ACTUAL QUOTE, and one that has been repeated by him ad nauseam, the core idea is still similar. This is not true however. If somebody buys an Xbox, they buy into the ecosystem. They don't buy it, dig a hole, and cover it with dirt. A sold Xbox propagates the brand. It sells software. It sells subscriptions. And accessories. A sold Xbox is literally a LOCK to bolster the division in some way. He thinks otherwise though. So yes OF COURSE the PS4 vs the XB gaming revenue is "unfair". That's the whole point. It's because the PS4 sold so many consoles. That's still the ticket to ride. I will say, that since he started with this rhetoric, things have shifted somewhat towards to importance of services, and will continue to do so. but we're still very much not to a point where we can deal in the absolutes he WISHES were representative of reality. Hey Azz! How funny is my lack of understanding? If you piss your pants from laughing too hard, send a picture.


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Ganoncrotch (on 21 July 2019)

Wait!? The CEO of the brand being outsold 7:1 by its rivals says that sales aren't that important. Well he has an unbiased and no reason whatsoever to try to spin a disaster now does he.

You know there's a point when you're posting about how this site and the internet are all delusional and then look at the numbers on the front page and think to yourself that you are championing a system in a fight which has lost years ago, you're no longer on the deck of a burning ship, you're now 30k leagues under the sea claiming your ship is doing fine.

THAT is delusional.


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HylianSwordsman (on 21 July 2019)

How do I turn off notifications for just one comment thread? I think I want to take this to a forum thread. I might make one.


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Ganoncrotch (on 21 July 2019)

@Azz - I read as far as you being all grown up, then I was out.

I would have trusted someone who was grown up to be able to see which brands have any forms of good grace from customers still. you can shift the goals around to the fact that PC's exist or the minecraft game which MS bought exists, but at the end of the day, as of right now, Xbox as a brand is selling twice as well as the decade old 3ds and is just as relevant. The brand is dead.

As for PC gaming being a thing, Games for windows live existed during the original Xbox, which sold 25m, and still in the X360 which sold nearly 4 times that amount, PC gaming isn't where Xbox fans have gone, they're on rival brands.


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HylianSwordsman (on 21 July 2019)

http://gamrconnect.vgchartz.com/thread.php?id=240618&page=1#

Look what you made me do guys. What can I say, I was really bored at work, and had a lot to say about this.


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HylianSwordsman (on 21 July 2019)

Hmm, can't link things in these comments or it autodeletes your comment...

So yeah, I was really bored at work and had a lot to say about this, so I made a thread. Go look what you made me do. And stop commenting here so I stop getting notifications.

Title: Hardware First, Software First, Services First: How The Big 3 Sell Their Brands, As I See It


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COKTOE (on 21 July 2019)

Yeah. Links behave very strangely in the new and articles pages. As you can see, your comment with a link is now visible. I think I might bookmark this page, and use it an an exclusive means to communicate with you going forward.


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Azzanation (on 21 July 2019)

Thanks Hylianswordmans. Ill have a read. This is my last comment here, d oesnt seem to be going anywhere in here.


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