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Microsoft Expects its Gaming Revenue to Decline Between April and June Compared to Last Year

Xbox One Logo, Microsoft

Microsoft Expects its Gaming Revenue to Decline Between April and June Compared to Last Year

Today Microsoft hosted its quarterly conference call for investors and analysts, and Chief Executive Officer Satya Nadella and Chief Financial Officer Amy Hood talked about the performance and outlook of the Xbox business.

Nadella kicked the conversation off by talking about Microsoft’s investments in gaming, defining the field a “massive opportunity.”

He also talked about cloud gaming and integration across PC, mobile, and consoles.

“We’re investing in content, community, and cloud to capture our massive opportunity in gaming, delivering record user engagement again this quarter. Microsoft’s Games stack brings together our tools and services to empower game developers from independent creators to the biggest studios to build, operate at scale cloud-first games across mobile, PC, and console.

Our Xbox Live community now 63 million-strong is key to our approach and we’re enabling developers to reach the highly-engaged gamers on iOS and Android for the first time. Our fast-growing gaming subscription service game pass is expanding our reach bolstered by a growing pipeline of first-party content, and project xCloud, our new game streaming service, will be in public trials later this year.”

Interestingly, Hood mentioned that gaming revenue in the latest quarter (between January 1 and March 31), while growing year-on-year, was still lower-than-expected. That being said, Xbox Live and Game Pass subscriptions showcased continued momentum.

Speaking of the outlook for the current quarter (between April 1 and June 30, 2019), Microsoft expects gaming revenue to decline year-over-year driven by the “tough comparable” in Xbox software and services and the continuation of the (declining) hardware trends from the past quarter

If you’re not familiar with this kind of lingo, it means that last year software and services were very strong, and Microsoft doesn’t expect to match that performance, while hardware revenue is expected to keep declining.

Hood also added that Microsoft plans to “invest heavily” in several strategic areas, including gaming.

If you want to read more about Microsoft and Xbox’s performance in the past quarter, you can check out our dedicated article.

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