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Microsoft gaming business up 8%

Xbox One X launch drives year-over-year revenue growth for the holiday quarter

Microsoft today reported its quarterly earnings, giving a glimpse into the health of its gaming business in the process.

Over the final three months of 2017, Microsoft's gaming business brought in $3.92 billion, up 8% year-over-year. Much of that growth was driven by sales of the Xbox One X, which launched during the quarter at a premium price point of $500. Microsoft said hardware revenues for the quarter were up 14% year-over-year.

Microsoft's gaming software and services revenues were also up, but not as sharply. The company saw a 4% rise year-over-year, with continuing growth in digital distribution helping offset first-party AAA revenues that were down compared to the previous holiday season. Microsoft's 2016 holiday lineup included Gears of War 4 and Forza Horizon 3, while the 2017 slate relied on Forza Motorsport 7.

As for Xbox Live, Microsoft reported 59 million active users on the service during the last three months of the year, up 7% year-over-year.

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