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Games and services fuel rising Xbox earnings as console sales falter

Microsoft's earnings report for the 2018 holidays show that while Xbox console sales were down year-over-year, the company's games business appears to be flourishing. 

Today's the day Microsoft publicized how much it earned over the 2018 holiday quarter, and while Xbox console sales were down year-over-year, the company's games business appears to be flourishing. 

Notably, Microsoft says that during the three months ending December 31st its games-related revenue hit $4.3 billion, 8 percent higher than it was in the same period a year prior.

That encompasses sales of Xbox consoles, Xbox Live services, first-party games and third-party game royalties, and Microsoft says the increase was driven primarily by a 31 percent year-over-year rise in revenues from Xbox software and services.

Meanwhile, Xbox hardware sales actually declined year-over-year by 19 percent, which Microsoft chalks up to the launch of its more powerful Xbox One X console during this same quarter last year. Also, the company claims it saw 64 million active Xbox Live users in the month of December, which is about 5 million more than it reported during December of 2017.  

Microsoft's overall revenues and profits each rose more than 10 percent year-over-year, something the company attributes to the strong performance of its cloud tech businesses. 

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