How's Xbox Doing? Here Are the Key Takeaways From Microsoft's Earnings

Hardware down, software up.

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Microsoft today reported earnings for the quarter ended March 31, and it was a mixed bag. The company announced that Xbox hardware sales dropped, while game sales and Xbox Live revenue rose.

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Sales of Xbox hardware (Xbox One and Xbox 360) decreased 26 percent during the quarter, with the downturn attributed "mainly" to a fewer Xbox 360s sold and lower prices of the Xbox One. In March, Microsoft implemented a $50 price drop on the Xbox One, a promotional price good through April 30.

This price cut made the Xbox One $50 cheaper than the rival PlayStation 4, but it was not enough to swing things in Microsoft's favor, as Sony's console sold the most in the US during March. The PS4 also outsold the Xbox One in the US during February and January this year.

Microsoft no longer provides system shipment figures.

On the bright side for Microsoft, Xbox Live revenue rose by 22 percent. This growth was driven by more subscribers, as well as more money spent per transaction and more purchases overall.

Game sales also grew during the quarter, rising by 9 percent, led by Minecraft. Mojang's sandbox game was the only title that Microsoft called out in its earnings report.

Finally, overall gaming revenue for Microsoft increased by $64 million, a rise of 4 percent compared to the same period last year.

Microsoft's gaming division is housed in the company's More Personal Computing division, which also covers Microsoft Office products, among others. For Microsoft overall, the company posted $22.1 billion ($21.7 billion last year) in revenue for the quarter, while profit came in at $5 billion ($5.1 billion last year).

As for the other two platform-holders, both Sony and Nintendo will report earnings next week. Check back soon for more.

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