Microsoft gaming revenue up 44% despite quiet Q1 2019

UPDATE: Platform holder to expand Xbox Game Pass offering on PC

Original story (24/10/2018): It was a quiet first quarter for Microsoft's gaming division, but that didn't stop it from posting a 44% year-over-year increase in gaming revenue anyway.

The company's Q1 2019 earnings report shows that this increase was driven largely by third-party titles in a quarter that didn't see any first-party releases. Xbox software and and services revenue was up 36% year-over-year on its own, and Xbox Live is now up to 57 million MAU.

Hardware saw an even more dramatic year-over-year increase of 94%, which Microsoft attributes to early sales of holiday hardware bundles.

This increase contributed to $10.75 billion in revenue from the company's "More Personal Computing" segment, which also includes Windows OEM, commercial products, and cloud services. The segment overall saw 15% year-over-year growth.

Microsoft's overall Q1 2019 was $29.1 billion, up 19% year-over-year.

Next quarter looks to be slightly noisier on the gaming side of things with the release of Forza Horizon 4 factored in, as well as the Xbox Adaptive Controller and Microsoft's console subscription service, Xbox All Access.

Update (25/10/2018): Speaking during an investor call, Microsoft CEO Satya Nadella confirmed that Xbox Game Pass will be fully expanded to PC.

Currently PC gamers only receive access to the latest first-party titles through Game Pass, but now Microsoft intends to expand the offering to include older titles and third-party releases, reflecting the offering on Xbox.

"Xbox has the key gaming community and the monetisation capabilities," said Nadella. "Whether it's first-party games or third-party games, we are best-in-class in that monetisation and that's what's reflected in the results.

"So given that structural position, we are going to make sure that we keep increasing the strength of the community.

"You see that already with Minecraft going to all platforms and that increasing the intensity of the community and you'll see us do more of that. Obviously, bringing Game Pass to even the PC is going to be a big element of that."

Additional reporting by Haydn Taylor.

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