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Game revenue down 21% at Microsoft as Xbox hardware sales slow

Revenue for Microsoft’s video game business is down 21 percent year-over-year at the close of the second quarter of FY 2020, a decline the company blames both on slowing hardware sales and a tough comparison against a stronger-than-usual Q2 (driven by an unnamed third-party title) back in FY 2019.

All in all, Microsoft’s game revenue decreased $905 million for the quarter ending December 31, 2019. Revenue from Xbox hardware sales alone fell 43 percent year-over-year, a decline Microsoft chalks up to a decrease in both the number of consoles being sold and lowering prices of Xbox systems.

Xbox content and services fell $295 million year-over-year, or by 11 percent. Microsoft says growth in its own subscription services (likely Xbox Game Pass) helped offset a decline caused mostly by the fact that an unnamed third-party title set the bar high during the same quarter last year.

In terms of revenue, the “More Personal Computing” category that houses Microsoft’s game business (alongside the likes of Windows, search advertising, and Surface revenue), came in at 13.2 billion for the quarter, up from $13 billion year over year.