Games News

Microsoft report record Q4 financials but software sales dip

Microsoft
Xbox One S All-Digital console
Xbox One S All-Digital

In their earnings release for fourth quarter of fiscal year 2019, Microsoft said that the company hit record financial results. Nevertheless, not everything was fun and games as the gaming segment's financials weren't all that great.

We're talking about the quarter ended 30 June 2019, and Microsoft are boasting record results in, with revenue at $33.7 billion. This is a 12 per cent increase and has been driven by growth across the board. 

Unfortunately, Microsoft's performance in the gaming segment has been less than stellar and they reported a 3 per cent drop in the gaming software and services segment.

Interestingly enough, the company pointed the finger at Epic's Fortnite: Battle Royale, saying how sales from "a third-party title" were behind this drop.

"Xbox software and services revenue declined 3% against a high prior year comparable from a third-party title, offset in part by subscriptions growth", they wrote.

Gaming revenue dropped by $233 million compared to the year before, which amounts to 10 per cent.

Additionally, Xbox hardware revenue dropped by as much as 48 per cent, so Microsoft's sales of Xbox One and Xbox One practically halved compared to the same time in 2018.

Of course, diminishing hardware sales are no surprise as the PS4-Xbox One generation is getting ready for a replacement.

Microsoft have been touting Xbox Scarlet and its performance in Halo for a while now, so it's understandable that hardware sales would dip. Nevertheless, 48 per cent had to hurt.

Thankfully, Microsoft offset the losses elsewhere and their Azure revenue growth of 64 per cent drove their server products and cloud services revenue by 22 per cent. We're talking about the same tech that prompted the unholy union between Sony and Microsoft in their quest against Google Stadia. 

Epic GamesXbox One S All-Digital consoleFortnite, Horde Rush

Microsoft's chief operating officer Satya Nadella said, "It was a record fiscal year for Microsoft, a result of our deep partnerships with leading companies in every industry."

You can check out the exact breakdown of each of Microsoft's segments in their FY19 Q4 earnings report.