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Games revenue slows to a crawl at Microsoft

Games revenue slows to a crawl at Microsoft

November 3, 2017 | By Chris Kerr




Microsoft's financial report for the quarter ended September 30 is in, and games revenue has slowed to a crawl on the eve of the Xbox One X launch. 

Although Microsoft's overall revenue reached $24.5 billion, a year-over-year rise of 12 percent, games revenue only saw a 1 percent increase. 

That puts games revenue for the quarter at $1.89 billion, and Microsoft claims stuttering Xbox hardware sales are to blame for the slowdown. 

While hardware might be struggling to capture the imagination of consumers, there was a silver lining of sorts, and revenue from sales of Xbox software and services actually rose by 21 percent. 

That rise was driven by a higher volume of Xbox Live transactions, but was ultimately offset by declining console sales and hardware price cuts.

The company is now looking towards the Xbox One X for a shot in the arm, and expects to see games revenue  regain momentum once the console hits shelves on November 7.

"We expect revenue growth from the launch of the Xbox One X console and continued healthy growth of software and services revenue," explained Microsoft CFO, Amy Hood. "In Q2, the higher mix of gaming hardware revenue will significantly impact both the segment and company gross margin percentages."



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