Microsoft has released its quarterly financial report for the fourth fiscal quarter and full year ending on June 30, 2016. Unfortunately for the company, the gaming division is struggling a bit. Gaming revenue dropped $152 million (9 percent year-over-year). Most of that drop is due to the 33 percent drop in Xbox hardware sales, due to lower Xbox One sales and the lowered price of the Xbox One.
All is not lost for Microsoft though, as Xbox Live revenue increased 4 percent.
Microsoft is losing ground to its competition, Sony. The PlayStation 4 is the king of this generation thus far, with 40 million consoles sold to date. The company is looking to sell another 20 million by April next year according to forecasts. Microsoft itself stopped giving Xbox One sales number back in October of last year.
Microsoft's rival also has PlayStation VR coming this October, which could potentially be the virtual reality headset that really reaches the average consumer. Sony is moving from strength to strength, while Microsoft flounders.
Microsoft is hoping to make up for the gap with upcoming hardware releases. The first is the Xbox One S, which is coming on August 2 and brings a smaller form factor and 4K video support to the table. The second is the Scorpio, Microsoft's upgraded Xbox One, which is planned for a launch in winter of 2017. The problem with the latter release is Nintendo's NX and Sony's upgraded PlayStation 4, code-named Neo, will probably launch prior to that. Scorpio is a shot at a market that will change drastically before its debut.
Sony retains strength in multiplatform games and it's the only current-generation console supported by Japanese developers. Microsoft already said that it's doubling-down on platform exclusive games like ReCore, Forza Horizon 3, and Sea of Thieves, but it doesn't seem to be helping much. What's the way forward for Microsoft?