Microsoft’s holiday earnings show the Xbox 360 riding into the sunset

microsofts holiday earnings show the xbox 360 riding into sunset kinect360

Microsoft’s Thursday earnings report was an event for tech industry pundits, industry figures, investors, and every person on the planet with a stake in the future of the console gaming and the PC market. The October through December quarter marked a major transition for Microsoft as it introduced Windows 8, rebranded its media businesses under the Xbox Music/Video banner, and released of the Surface tablet. All eyes were on Microsoft.

Would the giant see any change in its mediocre performance? Yes and no. Sales grew by 3-percent year-on-year to under $21.5 billion, but income dropped 3-percent to just under $6.4 billion.

The Windows division posted decent revenue numbers of $5.88 billion, a 24-percent increase from the same quarter last year, thanks to the sale of over 60 million Windows 8 licenses to date. Server & Tool business also saw sales of $5.19 billion, a 9-percent increase this quarter compared to the same time frame last year, but the Business Division showed a 10-percent decrease, down to $5.69 billion. Overall, the picture is fair, but not good.

Typically, one of the highlights for Microsoft is its entertainment division, but Microsoft may have a problem: Xbox 360 sales are withering.

Microsoft’s Entertainment & Devices division, which recorded a decrease of 11-percent, was most damaged by the Xbox 360. “Xbox 360 platform revenue decreased $1.1 billion or 29-percent, due mainly to lower volumes of consoles sold and lower video game revenue, offset in part by higher Xbox Live revenue,” reads Microsoft’s statement. “ We shipped 5.9 million Xbox 360s during the second quarter of fiscal year 2013, compared with 8.2 million Xbox 360 consoles during the second quarter of fiscal year 2012.”

This isn’t totally unexpected. Microsoft is actively winding down the Xbox 360 business even as it increases the prominence of the Xbox name by rebranding services like Zune as Xbox Music. The company also spent 21-percent less on Xbox 360 marketing this year, while its R&D spending grew 25-percent as it develops the next Xbox. Toss in a year with less blockbuster releases than in 2011 (which, admittedly, was an exceptional year), and the sagging numbers aren’t surprising.

Microsoft is starting to see the same sort of swift decline that Nintendo did with the Wii in 2010. Like the Wii between 2008 and 2010, the Xbox 360 has enjoyed nearly uncontested success in the US since releasing the redesigned 360 in June 2010. It’s been the best-selling console every month in the country since, even though worldwide the PS3 has caught up. But also like the Wii, the precipitous decline from previous holiday sales highs seen this past quarter shows that Microsoft’s market’s been saturated. And with most developers looking towards the future and developing with an eye on next-gen consoles, it’s unlikely that upcoming software will make a significant difference. 

The new Xbox is coming, so Microsoft’s Entertainment Division has that to bank on. There is a worrisome trend inside these numbers, though: The Kinect did not keep Xbox 360 sales growing for very long. Microsoft’s 2010/11 surge for the Xbox was in part fueled by the motion control device, but it no longer appears to be selling hardware to new customers. The burden on the next Xbox then, is new novelty beyond high end graphics or even motion control.


Microsoft targets Chrome OS with $189 Windows 10 laptops for education

Microsoft announced seven new low-cost Windows 10 laptops, all priced under $300 to take on Chromebooks and iPads in the education market, along with a new Microsoft Allora stylus for students using the Surface Go tablet.

Xbox One X vs. PS4 Pro: Which console is more powerful?

Far from cooling down, the console wars are only getting more intense. We compare Microsoft's Xbox One X to Sony's PlayStation 4 Pro to help you decide which premium console is right for you.

Microsoft leans on A.I. to resume safe delivery of Windows 10 Update

Microsoft is leaning on artificial intelligence as it resumes the automatic rollout of the Windows 10 October 2018 Update. You should start seeing the update soon now that Microsoft has resolved problems with the initial software.

Microsoft to separate Cortana from search with the next version of Windows 10

Changes are on the way for two key features in Windows 10. A separation of Windows 10 search and Cortana will allow Microsoft to more often innovate on each of the features independently.

Wifi Porter is a high-tech block of wood that lets you share your broadband

Tired of manually connecting your guests to your home Wi-Fi network? The latest invention from the folks at Ten One Design, the WifiPorter, allow individuals to connect to your Wi-Fi with the tap of their phone, or by scanning an available…

Midrange Nvidia GTX 1660 Ti graphics card may be 20 percent faster than GTX 1060

In the freshest development in graphics card rumors, alleged benchmarks are showing that the GTX 1660 Ti graphics card could be as much as 20 percent faster when compared to the older GTX 1060. 

It took Dell years to fix 1 problem on its best laptop. Here’s how it did it

The new Dell XPS 13 moves the webcam from the below the screen to the top, finally vanquishing the one obstacle facing thin, sleek laptop displays. We have the exclusive story on how it was done.

Work and play anywhere with these portable, large-screen monitors

Via a recent and successful Kickstarter campaign by Unick, a new line of portable, large-screen monitors has been announced. The Gemini Taihe line of monitors offers two models: the Gemini FHD and the Gemini UHD.
Product Review

The Digital Storm Aventum X is an unstoppable gaming PC. Trust us, we tried

Packed with dual-Nvidia RTX 2080 Ti graphics card and a 9th-generation Intel Core i9 processor, the Aventum X is an infinitely upgradeable gaming PC that’s capable of far more performance than you’ll ever need.

Breeze through security with these checkpoint-friendly laptop bags

Getting through airport security is a drag, but your laptop bag shouldn’t be. Thankfully, these checkpoint-friendly laptop bags will get you and your gear to your destination with ease.

Ditch the backdrop from your photos with these handy tools

Need to know how to remove the background from an image? Here's how, whether you prefer to use a premium program like Photoshop or one of the many web-based alternatives currently in existence.

Think someone's leeching off your Wi-Fi connection? Here's how to find out

It's important to find out immediately if anyone is stealing your bandwidth. Here's how to tell if someone is stealing your Wi-Fi using a few simple tools, along with some suggestions on improving security.

Open RAR files with the greatest of ease using these awesome applications

Few things are more bothersome than not being able to open a file when you need it most. Check out our quick guide about how to open RAR files in Windows and MacOS. We will walk you through the process, step by step.

‘Flexgate’ is the latest controversy plaguing some MacBook Pro owners

iFixit recently uncovered a new "Flexgate" issue with MacBook Pros after some consumers reported a "stage light" effect, where the backlighting on the device would fail and cause the bottom of the display to become slightly distorted.