Microsoft’s Xbox hardware sales drop sharply, but Surface sales are up

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Microsoft’s revenue in its fourth fiscal quarter and its 2019 fiscal year was up, with the Intelligent Cloud division in particular doing good business. Xbox hardware sales dropped 48 percent, but Surface grew 14 percent.

Microsoft CEO Satya Nadella spoke of record figures when the quarterly and annual figures were announced. He was not talking about gaming because its turnover fell by 10 percent. In particular, Xbox console hardware sales fell by 48 percent. The console market is waiting for a new generation of hardware. For Microsoft, that’s Project Scarlett. Turnover from software and services related to Xbox fell less, by 3 percent.

Windows sales for the business market grew 18 percent but that for the consumer market fell by 8 percent, with the entry-level segment in particular struggling, possibly due to competition from Chromebooks. Surface sales grew 14 percent and that division now accounts for quarterly sales of $1.35 billion.

The entire More Personal Computing division, which includes Xbox and Windows, had a 4 percent increase in revenue to $11.3 billion.

The Intelligent Cloud group’s revenue grew 19 percent to $11.4 billion. with revenue from Azure even increasing by 64 percent. The Productivity and Business Processes business unit also performed well with a 14 percent increase in sales. In particular, the Office 365 business service revenue grew by 31 percent, and Microsoft now has 34.8 million consumer Office 365 subscribers, up from 31.4 million a year ago. LinkedIn revenue also grew by 25 percent.

As a result, Microsoft’s quarterly revenue rose 12 percent to $33.7 billion and quarterly profit rose 49 percent to $13.2 billion. Annual revenue was 125.8 billion, 14 percent higher than last year, while annual profit increased by 39.2 billion 137 percent.

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