Microsoft’s financial report for the previous quarter is now out, and… it’s not exactly good news, really.

Xbox is doing okay overall, with 1.6 million units shipped over the three months covered in this period. That number might seem to be low, but it’s lower still- it combines the sales of Xbox 360 and Xbox One. This probably means that, realistically speaking, neither console sold a million units worldwide in this period, which is shockingly poor performance.

“Xbox Platform revenue decreased $306 million or 24%, driven by a 20% decline in console volume and lower prices of Xbox One consoles compared to the prior year. We sold 1.6 million Xbox consoles during the third quarter of fiscal year 2015 compared with 2.0 million consoles during the third quarter of fiscal year 2014,” Microsoft said.

It wasn’t all bad news, however- while the Xbox may be struggling, the Surface line of tablets is finally a hit, thanks to the Surface Pro 3 consistently posting strong numbers. With the recent announcement of the Surface 3, and the strong word of mouth that it is generating, Microsoft should see its performance in that segment of the market go only up.

However, from a gaming perspective, it’s hard to deny that as of right now, they are in a very bad place. Even considering the best case scenario – all consoles sold were Xbox One units – and adding it to Microsoft’s 10 million shipped announcement from last December only brings the Xbox One’s lifetime shipments at 11.6 million units. That is still nowhere close to the 20 million sold that the PS4 had managed as of more than a month ago.

Hopefully, Microsoft is able to turn the tide on this console around, and turn it around soon.

In an internal memo to employees, Microsoft CEO Steve Ballmer stated that the deal allowed for Microsoft to accesss “incredible talent, technology and IP.” “Clearly, greater success with phones will strengthen the overall opportunity for us and our partners to deliver on our strategy to create a family of devices and services for individuals and businesses that empower people around the globe at home, at work and on the go, for the activities they value most.”

Nokia CEO Stephen Elop, who previous worked for Microsoft, will be head of the division. Meanwhile 32,000 Nokia employees will officially be a part of Microsoft. A substantial step forward for Microsoft or a rather odd choice? Stay tuned for more.