Xbox console sales decline continues

Microsoft's continued decline in Xbox console sales continued through the last financial quarter, the company has confirmed.

In what is now a familiar pattern - and one not limited to Microsoft - revenue from gaming hardware fell again, this time by 42 percent. That's down further on the 31 percent fall reported back in April this year, for the quarter before.

Microsoft's gaming revenue overall was up overall by 44 percent, thanks to a significant boost from the addition of Activision Blizzard, which Microsoft bought for $68.7bn before its latest round of layoffs. Without Activision, growth would have sat around three percent.

All of the big three consoles are seeing sales drop. Xbox Series X/S will pass its fourth anniversary this November, and it's expected Microsoft will launch refreshed models of its console range around the same time. Sony's rival PlayStation 5 is of a similar age, and reports suggest a souped up PS5 Pro model is also on the horizon. Nintendo, meanwhile, will unveil Switch 2 before next April.

But Microsoft suggested it knows it must do more than simply launch new consoles to continue growing its gaming sector.

Speaking to investors, Microsoft boss Satya Nadella said the company's strategy so far had been to build up content pipelines for players on Xbox consoles. Next, it wanted to ensure this content was being delivered wherever people play games, such as on PC, smartphone and cloud - such as the recent addition of Xbox to Amazon Fire TV.

"The real goal here is to take a broad set of content to more users in more places, and build something that looks more like, to us, a software annuity and subscription business with enhanced transactions and the ownership of IP which is quite valuable long-term," Microsoft exec Amy Hood said. "We're encouraged by the progress and how we're making progress with Game Pass."

On a rosier note, Nadella painted the results as a picture of overall growth, and pointed to a strong pipeline of game launches over the next year including Call of Duty: Black Ops 6 in October.

Nadella also noted the impact of Amazon's Fallout TV series on Bethesda's back catalogue of Fallout RPGs, available to play on Xbox Game Pass. "Hours played on Game Pass for the Fallout franchise increased nearly five times quarter-over-quarter," Nadella revealed - lining up with the boost noted by Fallout boss Todd Howard back in May.