Despite Strong Xbox One S Sales, Microsoft’s Gaming Revenue Declines by 5%

Microsoft’s Gaming Revenue Down

There is no denying the Xbox One S is the hottest selling console on the market right now but sometimes strong console sales are not enough. Today, Microsoft posted its financial results for the first quarter of fiscal year 2017 and overall its gaming revenue declined by 5%.

Microsoft Great Moments Xbox One S

As usual, Microsoft did not announce exactly how many consoles they sold. They did; however, report that gaming revenue declined 5% driven by lower Xbox console revenue offset by higher Xbox software and services revenue. Gaming revenue reached a staggering $1,896 billion, boosted by the release of the Xbox One S, which beat the PlayStation 4 for the last 3 months in a row in sales. Microsoft notes they won Q1 in USA, driven by the new Xbox One S and new Xbox One game titles.

Xbox Live monthly active users hit 47 million for the quarter, which is up from 39 million year-over-year, but down two million compared to Q4 2016 when the company reported 49 million. This is unusual, considering the sales of Xbox One were up, per NBD results, over the last three months. Even if current user were to upgrade to Xbox One S, that wouldn’t explain the decline in XBL users.

Here is a breakdown of the numbers:

  • Revenue was $20.5 billion GAAP, and $22.3 billion non-GAAP
  • Operating income was $5.2 billion GAAP, and $7.1 billion non-GAAP
  • Net income was $4.7 billion GAAP, and $6.0 billion non-GAAP
  • Diluted earnings per share was $0.60 GAAP, and $0.76 non-GAAP


SOURCE, SOURCE, SOURCE