Microsoft recently held its fourth quarter earnings call for its 2018 fiscal year. In it the company revealed that gaming revenue had grown a whopping 39% year-over-year. CEO Satya Nadella commented on the gaming division’s success by stating that Microsoft would continue to invest aggressively in it.
“In gaming, we’re pursuing our expansive opportunity from the way games are created and distributed, to how they’re played and viewed, surpassing ten billion revenue this year for the first time,” said Nadella. “We’re investing aggressively in content, community, and cloud services across every end-point to expand usage and deepen engagement with gamers. The combination of Xbox Live Game Pass subscription and Mixer are driving record levels of growth and engagement.”
Nadella isn’t the only one to see how much Microsoft could grow by investing in gaming. Canadian businessman Kevin O’Leary believes that Microsoft’s gaming potential is an aspect of the company that people don’t focus on enough.
“The gaming side of this company, the ability to move it all on to subscription service and become a ubiquitous platform globally in gaming is a potential that not many people talk about yet the company continues to move in that direction,” said O’Leary. “I think that’s why this stock will actually expand its P/E in the next year. It will start to trade as something different than a dino tech that it used to be.”
The Xbox One may have fallen behind this generation in terms of console unit sales, but Microsoft has increasingly focused on player engagement and drawing people into the Xbox ecosystem. In that regard, the company has found a lot of success with initiatives like Xbox Game Pass, backward compatibility, and Xbox Play Anywhere.