Xbox One sales are tanking, but Xbox Live subscriptions are blowing up
Our earnings are in the cloud too…
Microsoft just published its financials for Q4 of 2019, and on the Surface of things, the cloud is here to stay. Revenue was up year-on-year, breaking Microsoft’s own fiscal records with revenue of $33.7 billion and net income of $13.2 billion.
That record was in spite of lackluster Xbox hardware sales. Not really surprising, with a new console coming at some point next year, the customer base is patiently waiting.
A 48-percent drop in hardware revenue probably won’t change until the next-gen Scarlett hardware arrives. Even if Xbox is hoping that the All-digital Edition of the Xbox One S would help, there are still large quantities of DVD-equipped models selling for less as retailers liquidate stock.
Microsoft is now a trillion-dollar company
Microsoft’s market cap increased this quarter, giving it access to the same rarified air as Apple, as the Redmond-based giant is now a trillion-dollar company. That’s down to cloud services like Azure, and Office, and demand for businesses upgrading aging PCs to Windows 10.
- The Surface continued to take market share, with a 14-percent increase in revenue this quarter alone
- Gaming revenue declined overall by 10-percent in Q4, with a 3-percent drop in Xbox software and services revenue
- Xbox Live users increased to 65 million active users
Microsoft Teams also hit a new milestone, that of having more daily active users than Slack. It’s not that surprising really, as it’s bundled in with Microsoft’s business packages. Still, it’s only taken Microsoft two years to get to this point.
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