Xbox Q3 revenue drops 24% as price cutting hits bottom line

Microsoft sold 1.6m Xbox consoles for three months ending March 31st, a drop of 400,000 year-on-year.

That number includes Xbox 360 and Xbox One sales, and the platform holder has not split out the performance of these machines.

This performance meant that Xbox revenue was down 24 per cent year-on-year to $306m. This drop in revenue was also driven by the significant price difference of Xbox One this year compared with the year before. In the UK, Xbox has shaved around 130 off the price of the console, although it has also brought down manufacturing costs by removing the Kinect camera from the machine.

Hardware numbers may make for disappointing reading, but the software sales figures are significantly better. Microsoft’s first-party games – which now includes Minecraft, of course – increased 83 per cent to $305m.

Xbox also says that its Xbox Live users have increased by 30 per cent.

And despite a three month dip, for the nine months ending March 31st, Xbox sales are flat. 10.7m consoles were sold during that nine month period versus 10.6m in the previous financial year. However, because of the aforementioned Xbox One price cuts, revenue fell eight per cent to $471 million.