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Microsoft gaming revenue declined 7 percent last quarter (update)

Xbox controller
Xbox controller (Image credit: Windows Central)

What you need to know

  • Today, Microsoft reported its quarterly earnings.
  • Over the past three months, gaming revenue declined 7 percent.
  • Xbox content and services revenue stayed flat.
  • It'll be interesting to see if this changes during the busy Holiday 2019 period.

Updated October 24, 2019: In the earnings call, Microsoft said that it expects gaming revenue to decline by as much as 20 percent as the next-generation of consoles approaches. Despite this, the company said that Xbox Live user numbers were at a record high.

Today, Microsoft revealed its quarterly earnings report which revealed growth for a number of different divisions. A few weeks ago, the company announced that it would stop reporting Xbox Live member numbers and other statistics, and just focus on growth. Well, during the last quarter which ended on September 30, gaming revenue didn't exhibit any growth, but instead, decreased by 7 percent. Xbox content and services revenue stayed flat. Unfortunately, hardware revenue declined 34 percent.

(Image credit: Screenshot captured by Asher)

Microsoft warned investors that it expects console sales to decline as it moves towards Holiday 2020 when Project Scarlett is expected to launch. The company said the following in guidance from the previous quarter.

And in Gaming, we expect revenue to decline year over year at a similar rate... as we move through the end of this console generation and a challenging Xbox software and services comparable from a third-party title in the prior year... We expect revenue in our gaming business to be down slightly year over year as double-digit growth in Xbox Software and Services will be offset by declining console sales.

It'll be interesting to see if these numbers pick up because the holiday period is the busiest. However, consumers know that Project Scarlett is coming out in a year, so many potential buyers may want to wait for the new console.

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Asher Madan handles gaming news for Windows Central. Before joining Windows Central in 2017, Asher worked for a number of different gaming outlets. He has a background in medical science and is passionate about all forms of entertainment, cooking, and antiquing.

8 Comments
  • Ummm, it just about ALWAYS declines in the 3rd quarter because it is Summer in the Northern Hemisphere and not many new games get released during that quarter. Also the fact that many gamers are saving their money for the Holiday Season Blockbuster releases.
  • Isn't it a decline year over year?
  • Also don't forget the sales in November, which are massive thing in the US... in the UK... we literally get meh sales. So therefore not really a big thing in the UK, hoping that changes though lol.
  • It's year over year. Not compared to last quarter... But nothing surprising when you look at the life cycle of the product... The focus has to be on first party games and next Gen launch...
  • There is a pretty logical explanation for this, their biggest game release in the quarter people "bought" for two dollars.
  • It's absolutely normal in the 18 or so months up to a new generation for revenue to decrease. It has happened to every single console manufacturer on every single end of generation. Especially now we have had release windows for both Sony and MS. Expect revenue for PS4 and Xbox One to be considerably down for the this year and next.
  • "It has happened to every single console manufacturer on every single end of generation."
    Do you have a link or evidence of that? Or is this your usual bs "facts"?
    Just to be sure, we're talking about revenue here not console sales.
  • No problemo. Every console manufacturer has it end of Gen. Console sales drop by the millions when a new console is announced. Has happened to every single generation. I looked for about 2 mins. And found this article for you. https://www.gamesradar.com/annual-playstation-sales-and-income-decline/