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Revenue from Microsoft’s gaming division fell $905 million (21 percent) in its most recent fiscal quarter when compared to the same period the year prior, the company reported Wednesday.
The company cited a decline in hardware sales and decreased sale prices for its family of Xbox consoles. Revenue for Xbox hardware fell 43 percent year-over-year, due in large part to the late life cycle of the Xbox One console, which debuted in 2013, and the advent of the Xbox Series X next-gen console due out for the year-end holiday season.
Xbox content and services revenue also decreased significantly over the quarter, down $295 million (11 percent) year-over-year. Microsoft cited a high over the same quarter last year that was attributed “primarily from a third-party title,” a reference to Epic Games’ blockbuster battle royale title Fortnite, which earned a record $2.4 billion in 2018 before dipping slightly in 2019 to $1.8 billion.
It wasn’t all rainclouds for Xbox, however, as Microsoft did note a growth in subscriptions, such as Xbox Live, which the company revealed has over 65 million monthly active users as of November.
During a call on Wednesday afternoon, Microsoft CEO Satya Nadella revealed that the company set a new record for monthly active users on Xbox Live over the quarter, but did not reveal the exact number.
Looking ahead, Microsoft predicts a decline “in the low double-digits” for gaming revenue next quarter as the company prepares for the launch of its next-gen console at the end of 2020.
Overall, Microsoft’s revenue was up 14 percent year-over-year to $36.9 billion in Q2, with a net income of $11.6 billion, up 35 percent.