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Third-party sales boosted Microsoft Gaming revenue in Q3

Gaming revenue was up 18%, Xbox Live users up 13% to 59 million

Third-party game sales were key to an 18 per cent increase in Q3 Gaming revenue for Microsoft.

In the quarter ended March 31, 2018, Microsoft earned $2.25 billion in revenue from gaming, up 18 per cent year-on-year. The company noted that this was driven by principally by software and services, the revenue from which increased 24 per cent - "mainly from third-party title strength."

The importance of third-party releases is hardly surprises. Microsoft's only first-party offering of the quarter was Rare's Sea of Thieves, which launched the day before the close of the accounting period.

Sea of Thieves was available to all subscribers of Xbox Game Pass, as all first-party Xbox games will be. It attracted two million players in its first week, and debuted at the top of the UK charts.

The number of active users on Xbox Live increased 13 per cent over the prior year: from 52 million to 59 million, across console, PC and mobile.

In a call with investors, CEO Satya Nadella said that, "the console itself is the highest engagement console out in the marketplace." He also noted that the strength in the company's Azure cloud platform is yielding benefits for Gaming.

"We're taking all the knowledge of what it means to build any one of these first-party titles of ours and building it as a PaaS [product as a service] service in Azure for game developers. And the PlayFab acquisition speaks directly to that."

The More Personal Computing Segment, of which Gaming is a part, earned $9.9 billion in revenue in Q3, up 13 per cent over the prior year. Operating income increased 23 per cent to $8.3 billion.

Overall, Microsoft reported $26.8 billion in revenue, an increase of 16 per cent. Net income was up 35 per cent to $7.4 billion.

"Our results this quarter reflect the trust people and organisations are placing in the Microsoft Cloud," Satya Nadella said in a statement. "We are innovating across key growth categories of infrastructure, AI, productivity, and business applications to deliver differentiated value to customers."

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