As Xbox One X's Release Nears, Microsoft Provides An Overview Of Its Xbox Business

Microsoft is less than two weeks away from launching its newest game console, Xbox One X. The impending release of a new system tends to put a damper on sales of existing ones, and that appears to be the case with Xbox One, based on Microsoft's latest earnings report.

The company today reported its financials for the quarter that ended on September 30, 2017. During that period, gaming revenue was $1.896 billion, up 1% from where it was during the same period a year ago. That's due in large part to software and services revenue, which was up 21% thanks to "a higher volume of Xbox Live transactions," though that was offset by "a decline in revenue per transaction." Xbox Live monthly active users grew 13% to 53 million; that figure counts anyone who has logged in on Xbox One, Xbox 360, or PC in the last 30 days.

Hardware specifically saw a big decline, as revenue was down 48% year-over-year. Microsoft said that was because it sold fewer units, which were themselves sold at a lower price. The company is undoubtedly hoping to turn that around with the Xbox One X, which carries a premium price tag of $500/£450. That said, Xbox boss Phil Spencer has already acknowledged that Xbox One X is not for everyone and is not going to outsell the cheaper Xbox One S.

During a post-earnings conference call, CEO Satya Nadella referenced the upcoming launch of Xbox One X and echoed what Phil Spencer recently told us. Put simply, Microsoft believes success in gaming involves more than just Xbox One sales. That involves bringing more people to Microsoft and Xbox Live platforms and experiences, with Nadella saying this will require "fundamentally rethinking" how progress in gaming is considered.

Microsoft's More Personal Computing division, of which the gaming business is a part, brought in revenue of $9.4 billion, in line with where it was a year ago. The company overall saw revenue increase by 12% to $24.5 billion, while operating income was $7.7 billion, up 15%.