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Microsoft's games revenue slips due to declining Xbox console sales

Microsoft put out a new earnings report today that shows the fortunes of the company's games business slipping, something it chalks up primarily to low prices and declining sales of its Xbox consoles.

Microsoft put out a new quarterly earnings report today that shows the fortunes of the company's games business slipping, something it chalks up primarily to low prices and declining sales of its Xbox One console.

While Microsoft as a whole actually beat Wall Street's expectations by pulling in $5.5 billion in profits (non-GAAP) on $22.6 billion in revenue, revenue generated by its games division fell roughly nine percent year-over-year, to $152 million for the three months ending June 30th.

In its earnings report Microsoft blamed the decline on lower revenues from Xbox hardware, "mainly due to a decline in consoles sold and lower prices of consoles sold." While this encompasses both the Xbox One and the Xbox 360, the fact that the decade-old 360 was discontinued earlier this year suggests Microsoft is laying the brunt of the blame on its latest console.

Of course, it won't be Microsoft's latest console for long, since the company has recently laid plans to launch a revamped slimmer version, the Xbox One S, in two weeks' time.

Microsoft also noted that its Xbox Live platform is doing a bit better this quarter compared to last, with a 4 percent year-over-year rise in revenue and a 33 percent increase in monthly active users, which now number roughly 49 million.

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