Subscriptions are helping offset year-over-year dips
There’s a new generation of consoles coming this holiday, and that has spelled trouble for Microsoft’s gaming segment in the short-term. Anytime new hardware is on the horizon, consumers are understandably hesitant to buy current consoles. After all, they won’t be the latest and greatest in less than a year’s time.
Microsoft has posted itssecond quarter earningsfor its 2020 fiscal year, and Xbox has taken something of a predictable tumble. Gaming-related revenue is down 21 percent year-over-year, decreasing by $905 million. The main culprit is revenue from new Xbox One sales, which is down 43 percent. Microsoft attributes the decline to both fewer units moved and lowered prices during holiday sales.
Xbox’s revenue drop isn’t particularly surprising. These are the inevitable valleys associated with hardware that’s at the end of its life cycle. However, it must be nice to know that Microsoft can lean on subscription services like Game Pass and Xbox Live Gold as a source of stability when other areas are trending downward.
