Update: Xbox generates more revenue than many of Microsoft’s divisions including Windows. According to Michael Pachter, the Xbox division is profitable contrary to rumors perpetuated by various outlets and supposed insiders.
Microsoft just released its earnings for the last quarter and while revenue and profits are up as a whole, what about Xbox Live? Well, we have great news. Xbox Live active users grew to 52 million, up from 46 million year-over-year. Remember, active Xbox Live users refers to those players who used the online service within the last month. However, due to less hard-hitting game releases, the figure declined by 3 million as last quarter’s active users numbered 55 million. This signifies that membership has increased substantially from a year ago. The release of the Xbox One S as well as strong multiplayer games towards the end of last year contributed to the rise in memberships and engagement.
Due to the Xbox Live growth, gaming revenue went up 4% as a whole. This is great news and demonstrates the strength of the Xbox brand. However, if you just take a look at Xbox software and services, that facet witnessed 7% growth due to digital distribution becoming more popular. While Microsoft’s first-party games also contributed to the increase, it was mostly fueled by people purchasing their games through the Xbox Store instead of through traditional retailers. This coincides with GameStop’s recent announcement that they’re closing over 150 stores due to a decrease in sales. Not only do today’s figures bolster the health of the brand, but they also highlight the growing trend of digital distribution and ownership.