Xbox Sales Fall in Latest Quarter, But Minecraft and Xbox Live are Bright Spots
Minecraft to the rescue.
Microsoft on Thursday reported earnings for the quarter ended March 31, announcing that the company shipped (i.e. sold to retailers) 1.6 million Xbox consoles, which includes Xbox 360 and Xbox One, during the period. This compares to a combined shipment tally of 2 million consoles during the same period last year.
Total Xbox shipments have now fallen for a second straight quarter, as Microsoft moved 6.6 million combined Xbox consoles during the all-important holiday season this year, compared to 7.4 million during the same quarter the year prior.
Microsoft's Computer and Gaming Hardware division, which houses the Xbox business, saw its revenue fall $72 million, or 4 percent.
The company attributed the downturn primarily to "lower revenue from Xbox Platform," but offset by higher revenue from Microsoft's Surface line.
Xbox Platform revenue itself decreased $306 million or 24 percent; as mentioned above, total console volume fell by 20 percent. Microsoft also noted that the lower price of the Xbox One in the quarter compared to the same period a year prior further led to the decline.
Cost of revenue for Microsoft's Computer and Gaming decision decreased, led by a $265 million (27 percent) decline in Xbox Platform cost of revenue. This was driven by a lower volume of units shipped and a lower cost per console sold, Microsoft said.
It wasn't all bad news for Microsoft this quarter, however. Microsoft reports that Xbox Live and other store revenue increased by $144 million, or 32 percent, compared to last year. This was driven by an increase in Xbox Live users and revenue per user, the company said.
Meanwhile, Microsoft first-party game sales were up 49 percent during the quarter, led by Minecraft. This is the second straight quarter since Microsoft acquired Minecraft last year that the sandbox game has been a major contributor to Microsoft's first-party bottom line.
For Microsoft overall, the company posted $21.7 billion in revenue, up from $20.4 billion during the same quarter last year. Meanwhile, profit for the quarter was $4.9 billion, down from $5.6 billion last year.
Microsoft will hold an earnings call later today to discuss these results and answer analyst questions. Check back later for more.
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