Microsoft Confirms Xbox Hardware Revenue Fallen By 33%

Microsoft has confirmed via its financials that Xbox hardware revenue has dropped by 33% during its the final financial quarter of 2016. This is likely in part due to the price drops the Xbox One has had, lower number of units sold, and the discontinuation of the Xbox 360 line. The lower sales for the Xbox One console were probably anticipated due to the rumours of newer hardware, which were confirmed. The trend may continue depending on just how many people will opt to wait for the Scorpio instead of picking up the Xbox One S, which launches in August.

Gaming revenue also decreased by 9%, equal to approximately $152 million. This decrease would link in with the decreased hardware sales. Again this trend may continue over the next few months as summer is generally seen as a low point for trade, though the Xbox One S could galvanise sales a bit. The real indicator, in my opinion, will be the run up to Christmas where trade reaches its peak,  and how revenue compares to those of the previous years.

Source: Eurogamer

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From the heady days of the Mega Drive up until the modern day gaming has been my main hobby. I'll give almost any game a go.

13 Comments

  1. With the specs on the xbone s I’m sure this would increase. I wouldn’t mind buying one but until my ps4 has a red stripe line of death I’m holding out. I’d probably just stick ps4 I don’t like decisions.

  2. Microsoft completely s**t the bed with this.
    They announced the xbox one S and then immediately made it obsolete by announcing the scorpio (probably rushed forward due to the new ps4)
    Not only that, but they literally came out and said there will be no more xbox one exclusives and everything will be on pc as well.

    They’re just floundering around trying to respond to sony and valve while having no actual cohesive strategy of their own.
    Big shame really, a more competitive environment would only benefit the consumer in the end.

  3. A big factor is we’re a few years in now so sales were naturally going to slow. You should add that xbox live users increased by 3 million to 49m too.

    • We’re in the 3rd year, and prices have come down from the launch price. Sales shouldn’t really be slowing down at all now. They should be carrying on as they have been, or even selling more now.

      Unless you’re MS and you do something as spectacularly stupid as announce a new version. But not just yet, so you’ve got months of plummeting sales while people wait. And then instantly make that obsolete by announcing an even better version coming some time later.

      Sales might pick up with the XBoneS, a little bit. By the time Scorpio comes along, it’ll be too late.

      Has anyone ever screwed up a console launch as badly as MS? And then kept on doing stupid things? Even the stupidly high launch price for the PS3 didn’t end that badly. Sony turned that around to come out on top last generation.

      • Hate Microsoft much?

      • Not really, I just like seeing a company that big spend that much money screwing things up in an amusing way.

        Mostly because the best I could afford to get things wrong is accidentally ruining a cup of coffee by putting milk and/or sugar in it. And then I wouldn’t spend stupid amounts of money trying to salvage it.

      • No point me typing loads back and arguing our differing opinions back & forth, but I will point out that the Wii sold the most consoles last gen, and 360 sold the most games, so Sony were second at best in both aspects.

    • Starman – interestingly the PS3 didn’t dip (in year-on-year sales) until 5½ years after the Japanese launch.

      I really did expect Microsoft to have far stronger hardware sales this generation (after the initial launch) same as Sony and the PS3 but I fear that the PS4s sales were perhaps too strong – coupled with the very bad feeling a lot of the gaming community had for Microsoft with the launch fiasco – and simply haven’t been able to claw it back.

      • Though PS4 sales have also dropped so it’s not just limited to xbox. Personally I’m surprised how much xboxone has sold, given the uproar of the reveal and the terrible drm policies. They handed this gen to Sony with those stupid policies. Some still think it has them after all.

      • It’s all relative to be honest. I seriously doubt Xbox will top PS4 total sales ever, so it’s about rate of sales, and that depends on how everyone is doing, not just relative to MS.

        At the end of the day the Xbox One S is coming soon so all focus is on that. Everyone knows Neo is coming soon, Scorpio’s impact tantamounts to the same as Neo.

  4. I actually think that Microsoft would have done much better this gen if they had stuck to their original idea for the XB1.

  5. A ha *Nelson Styley*

  6. Having owned 3 Classic Xbox consoles, plus never had any real issues with my Elite Model 360, i do not ‘Hate MS Much’….

    But i did wonder what on earth they were playing at of late, by annoucing the Scorpio, which at this stage in the game is nothing more than a wants list of PC components for a future console, right after annoucing the S model XB1, which itself is making the XB1 look just a little dated (S model will offer HDR in games like Gears 4 etc XB1 cannot am i right in thinking?).

    The S model seemed ideally placed as the cheapest 4K Disc player, ideal for those recently upgraded to or planning to upgrade to a 4K TV, but then by annoucing Scorpio MS basically did a classic Atari of the A8/ST era….

    Knee jerked to news competion had more power hardware by annoucing they too had even more powerful hardware, only it was a long way off…basically making consumers think, well, i’ll just wait and see how yours turns out in 12 months+ rather than buy existing hardware, as you’ve just made clear it’s obsolete in technology terms.

    That raised an eyebrow, but it’s this concept of making ALL the XB1 exclusives avaiable on PC that baffles me..few of my friends already sold their XB1’s and gone back to PC gaming as a result.

    Sony, for all their flaws (and indeed they are many) still have the ace in the hole..PS4 is only place you can play Uncharted 4, Event Horizon etc etc…

    With MS, what do you plump for? cheapest/entry level option (XB1), an upgrade..XB1 S? or want the high end option now ? PC..or wait 18 months for high end console option (Scorpio) which itself will not stay high end for long as PC technology will outclass it within months of being launched.

    The whole Scorpio thing seemed a knee jerk reaction to Sony catching them on the hop by not just releasing a PS4 Slim…

    No wonder consumers are taking a wait and see or in some cases, stuff this, PC it is then…

    The Only On Xbox…marketing i knew from classic and 360 era Xbox, seems long gone now.

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