Microsoft Corp. has sold 6.6 million Xbox consoles in the fourth quarter of 2014, the company said in its financial report for the quarter. Despite of relatively successful holiday season, the Xbox revenue dropped year-over-year.

For the second quarter of fiscal 2015, which ended on the 31st of December, 2014, Xbox platform revenue declined 20 per cent to $703 million. Xbox One console adoption accelerated this holiday and was the top-selling console in the U.S. At the same time, sales of Xbox 360 systems dropped since end-users switched demand to the latest Xbox One system. It is noteworthy that the Xbox platform gross margin declined in the Q2 FY2015 because of the transition to new generation of consoles.

6.6 million Xbox consoles sold during the quarter is significantly lower than shipments of Xbox systems in the same period a year before. In the fourth quarter of 2013 the software giant sold 7.4 million Xbox systems.

Life-to-date sales of the Xbox One are unknown. On November 12, 2014, Microsoft announced that it had shipped almost 10 million units to retailers worldwide. After Microsoft lowered the price of Xbox One to $349 in the U.S., its shipments significantly increased, according to the company.

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KitGuru Says: Since Microsoft’s margins declined in the quarter, it is likely that the company continues to lose money on Xbox One and cannot offset the losses with sales of new games. As a result, it makes a great sense for the company to introduce a lower-cost version of the system as soon as possible.

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