In a call to investors, Microsoft reveals that sales of its Xbox One console have increased year-over-year but revenues from its hardware sector have declined.

It’s no secret that the Microsoft Xbox One has struggled to keep up with its closest rival, the Sony PlayStation 4, since the two consoles were released back in November 2013. In part because of confusing policies (such as the originally proposed ‘always on’ and game trading features), the Xbox One has lagged behind, with some analysts predicting that the PS4 will have almost doubled the Xbox One’s sales by 2019. However, despite the Xbox One’s sales struggles, Microsoft has not given up on its console and its continued sales push now appears to be paying off.

According to a Microsoft call to investors, Xbox One sales have increased year-over-year for the financial quarter which ended on March 31. Although the actual number of Xbox One consoles sold was not revealed, the company did say that the Xbox One’s reach and engagement are up compared to previous generations. Gaming hours on Windows 10 also grew by 50%, which Microsoft attributes to Xbox One titles being made available via the Windows Store.

But not all of the hardware stats were positive. as Microsoft also revealed that while Xbox One sales are up, hardware revenues have actually declined. Microsoft pointed to lower sales of the Xbox 360 and lower Xbox One pricing as the reasons for this.

This comes as little surprise given that Microsoft recently ended production of the Xbox 360 (likely because the aging console is no longer selling like it used to) and Xbox One discounts, such as the spring bundle deal, have seen the console’s pricing slashed greatly.

Xbox One Revision at E3 Rumor

During the investors call, Microsoft also revealed that revenues from Xbox Live have increased by 21%, a figure which follows the company’s recent announcement that the Xbox Live user base is now over 46 million. Microsoft cites a higher number of transactions, higher revenue per transactions, and increased revenue from Microsoft Game Studios as the major contributing factors behind this bump.

Looking to the future, Microsoft expects “continued healthy user engagement” and is looking forward to E3 2016 as well. While the company didn’t address the rumors during the investor call, it is also being speculated that a new Xbox One console is on the way, with some hoping for a slimmer model of the console. Xbox boss Phil Spencer has also said that fans should expect more information about the future of the Xbox One, Windows 10 and “beyond” over the next few weeks and months.

Source: Seeking Alpha