Update: Satya Nadella commented on Microsoft’s gaming business as well. He said:
“Our gaming business now is more than $9 billion and growing profitably. The gaming world is growing faster than ever before from gameplay across multiple devices, to the explosive growth in streaming and eSports, to new subscription services and mixed reality scenarios…We launched…new services (Mixer and Xbox Game Pass) to broaden our reach and enrich our gaming experience, both of which are off to a very strong start.”
This is great news for the company as well as Xbox One owners because this means that gaming is a division which is here to stay. Over the years numerous analysts and insiders have said that Microsoft wants to sell off the console brand but that’s clearly not the case given these numbers. There was also another rumor that said Microsoft had cut funding to the Xbox division. This was also discredited by Phil Spencer. Xbox is here to stay so everyone should get used to it.
Microsoft released their quarterly earnings report today and Xbox is as strong as ever. Even though Microsoft hasn’t really pushed out many games this year, the division showed strong figures and growth in key areas. Gaming revenue increased by $44 million or 3% to $1.66 billion, driven by higher revenue from software and services, offset in part by lower revenue from Xbox hardware. Xbox software and services revenue increased 11%, primarily due to a higher volume of Xbox Live transactions. Xbox hardware revenue decreased 29%, driven by lower prices and a decline in volume of consoles sold. Given the fact that Crackdown 3, Cuphead, Forza Motorsport 7 and other games are coming out in a few months, we should expect console sales to increase as well.
Aside from that, Xbox Live monthly active users grew by 8% to 53 million. Microsoft saw increase usage across Xbox One, Windows 10 and mobile. This is a testament to the fact that their Xbox Play Anywhere program and renewed focus on Windows 10 gaming is working. Plus, adding achievements to mobile games is probably another reason why even mobile gaming is up. Even though Xbox accounts for a small portion of Microsoft’s $24.7 billion quarterly revenue, it’s definitely a profitable division which is contributing its fair share to the company’s $6.5 billion profit. The future of the Xbox brand is definitely secure because of Xbox Live’s growth given how that’s the way Microsoft measures the success of its gaming endeavors nowadays.