first published on July 23, 2019 by Funker
Microsoft’s posted a 10% annual decline in gaming revenue in its fourth quarter report, and many believe that the waning popularity of Fortnite is playing a key role in those losses.
Microsoft reported that gaming hardware sales (Xbox) were down 48%, and gaming software and subscriptions dropped by 3% compared to last year’s fourth quarter.
Although Fortnite is “free-to-play,” users spend hundreds of millions of dollars each month on in-game purchases for unique skins, dances, etc. Epic must share part of that revenue with Microsoft for any V-bucks purchases made on Xbox. Less sales by Epic equals less shared revenue with Microsoft.
Microsoft Q4 FY2019 Results (Quarter ending Jun 30 2019)
– Gaming rev. down 10% YoY
– Gaming hardware rev. down 45% YoY
– Gaming software & services rev. down 3% due to lower sales from a key third party title (Fortnite) partially offset by Xbox Live and Game Pass subs increase. pic.twitter.com/e43N6L6Ezb
— Daniel Ahmad (@ZhugeEX) July 19, 2019
Fortnite’s popularity is slipping across all platforms in 2019 with 48% less month-to-month generated revenue compared to last year. Fortnite generated $203 million in revenue across all platforms in May 2019, which was a 38% drop from May 2018.
Reportedly, Microsoft isn’t worried or surprised about the declining revenue. The Xbox One is now six-years-old and a new generation of consoles is reportedly in the works for next year. Microsoft has also offset some of that lost revenue with the Xbox Game Pass, which just recently became available to PC gamers. Also, Microsoft is continuously working on Project xCloud, which will allow users to play anywhere on any device, and may be available for public testing next year.
Yet, what is the future of Fortnite? While it still has reportedly over 200 million players worldwide and is ranked 5th for current most popular PC games, it will certainly sustain a core following and support for years to come… but, there is always the new, best thing on the horizon to replace it.