Microsoft blames Fortnite for a dip in its software sales

According to Microsoft, its gaming sales decreased 3% from last year's thanks to a certain third-party title - Fortnite.

fortnite microsoft

It’s no secret that Fortnite is one of the biggest games in the world right now, and it’s absolutely raking in the cash – as does popular streamers playing it such as Tfue. Everyone in the world seems to be playing it – so much so that it seems to be causing the sales of other games to drop.

At least, that’s according to Xbox platformer holder Microsoft – which, in its quarterly FY2019 earnings report released today, blames Fortnite for a 3% drop in revenue from gaming software and services. That’s at least compared to this time last year – suggesting that either Fortnite has grown considerably since July 2018, or Microsoft simply didn’t have as much to offer people this year.

According to the earnings report, Microsoft’s overall gaming revenue decreased US$233 million, which equates to around a 10% drop in sales. The sales of Xbox hardware went down by a massive 48%, which the platform holder suggests is “primarily due to a decrease in volume of consoles sold” – whether that’s due to the quality of games available or down to consumers waiting on the Xbox Scarlett, Microsoft didn’t say.

Regarding Fortnite and Microsoft’s game sales, the publisher also notes that “software and services revenue declined 3% against a high prior year comparable from a third-party title.” While the report declines to specifically mention the name of this apparently gigantic sales-stealing “third-party title”, analyst Daniel Ahmad confirmed on Twitter that the game in question is indeed Fortnite.

It wasn’t all doom and gloom for Microsoft’s software sales however, as the increasing success of Xbox Game Pass, Xbox Live, Xbox Ultimate, and Game Pass for PC – and various subscription price increases – meant that some of that revenue dip was offset.

According to Microsoft CEO Satya Nadella, the company sees Game Pass as its new “business model” and that Microsoft is “well positioned” to take advantage of this new market – and reap the revenues. It also has high hopes for its game streaming service Project xCloud too. Hopefully Fortnite won’t be blamed this time next year if that fails.