As Xbox hardware sales fall, stay-at-home orders help drive up content & services revenue

Microsoft says that Xbox content and services revenue increased by $33 million year-over-year during the quarter ending March 31, 2020, thanks in no small part to stay-at-home order-driven jumps in engagement.

All in all, that $33 million jump only makes for a 2 percent increase year-over-year, partially due to the fact that a certain unnamed third-party title (likely Fortnite, judging by past reports) drove up content and services revenue during Q3 last year.

For Microsoft’s gaming business as a whole, revenue decreased by $14 million year-over-year, down one percent from the same period last year. Hardware revenue noticeably continues to slide downhill as would-be console buyers instead turn their attention to the next-gen Xbox Series X due out at the end of the year, with Microsoft reporting a 20 percent fall in revenue year-over-year.

It’s a similar story for the first nine months of the current financial year, also ending March 31, 2020. Revenue for Microsoft’s video game dealings fell 12 percent year-over-year, largely thanks to a 38 percent decrease in Xbox hardware sales.

That unnamed third-party title’s impact on last year’s content and services revenue once again means this year's numbers are being compared against an unusually high year. Microsoft says that difference is at least partly responsible for the fact that content and services revenue fell 4 percent, or $269 million, year-over-year.