dark        

Xbox revenue is down, but Game Pass is helping mitigate the damage

0

Subscriptions are helping offset year-over-year dips

There's a new generation of consoles coming this holiday, and that has spelled trouble for Microsoft's gaming segment in the short-term. Anytime new hardware is on the horizon, consumers are understandably hesitant to buy current consoles. After all, they won't be the latest and greatest in less than a year's time.

Microsoft has posted its second quarter earnings for its 2020 fiscal year, and Xbox has taken something of a predictable tumble. Gaming-related revenue is down 21 percent year-over-year, decreasing by $905 million. The main culprit is revenue from new Xbox One sales, which is down 43 percent. Microsoft attributes the decline to both fewer units moved and lowered prices during holiday sales.

However, software has also taken a hit. Content revenue decreased 11 percent year-over-year, down by $295 million. Microsoft notes that Q2 2019 had a particularly strong showing from third-party publishers, which is partially responsible for the dip this year. It'd be worse, but Xbox's service have helped mitigate the damage. Microsoft says the declines in content revenue are "offset in part by growth in subscriptions." The aggressive approach to Xbox Game Pass subscriptions is working, although Microsoft didn't say how many subscribers there are.

Xbox's revenue drop isn't particularly surprising. These are the inevitable valleys associated with hardware that's at the end of its life cycle. However, it must be nice to know that Microsoft can lean on subscription services like Game Pass and Xbox Live Gold as a source of stability when other areas are trending downward.

Form 10-Q [Microsoft]

You are logged out. Login | Sign up

 
 
 

TwitterRedditEmailFacebook
 
Brett Makedonski
Brett MakedonskiManaging Editor   gamer profile

While you laughing, we're passing, passing away. So y'all go rest y'all souls, 'Cause I know I'ma meet you up at the crossroads. Y'all know y'all forever got love from them Bone Thugs baby... ... more + disclosures


 


 



Filed under... #financial #Microsoft #Money #xbox #Xbox Game Pass #Xbox One

READER COMMENTS LOADING BELOW...


LET'S KEEP THE COMMUNITY GREAT


You're not expected to always agree, but do please keep cool and never make it personal. Report harassment, spam, and hate speech to our community team. Also, on the right side of a comment you can flag nasty comments anonymously (we ban users dishing bad karma). For everything else, contact us!