Sections

Microsoft reports "largest gaming revenue quarter ever"

Software and services drove Xbox to $4.23 billion revenue despite declining hardware sales

Microsoft's games revenue increased 8% in the second fiscal quarter, which CEO Satya Nadella declared as the "largest gaming revenue quarter" in the company's history.

In the three-month period ended December 31, 2018, Microsoft earned $4.23 billion in revenue from its games business -- an overall increase of 8% year-on-year.

That improvement did not come from hardware revenue, however. Hardware sales actually fell 19% over the same quarter last year, which hosted the launch of the Xbox One X.

Instead, Microsoft drew strength from software and services, which saw a 31% increase in revenue thanks to a combination of third-party sales, Game Pass subscribers, and Xbox Live users. In a call with investors, Microsoft CEO Satya Nadella confirmed that Xbox Live MAUs increased by 8% to reach a record 64 million people across console, PC and mobile.

According to Nadella, that included "the highest number of mobile and PC users to date. Xbox Game Pass subscribers and Mixer engagement also hit new all-time highs."

"Our investments in content community and cloud services across every endpoint drove both record user engagement and record average revenue per user and contributed to our largest gaming revenue quarter ever, driven by software and services," Nadella added.

Microsoft also acquired two more development studios in the second quarter: Obsidian Entertainment and inXile Entertainment. It now has 13 internal studios, having doubled its "first-party content capacity" in the space of six months.

More stories

Xbox experimenting with how to pay studios for Game Pass "because we don't think we have it figured out"

Phil Spencer also decries console fan tribalism as "one of the worst things about our industry"

By James Batchelor

The $70 AAA price point -- it's about time | Opinion

No consumer is going to be enthused about a price rise, but 15 years of $60 has done no favours to either gamers or creators

By Rob Fahey

Latest comments (2)

AT&T with five separate unconsolidated gaming businesses all with their own publishing and development infrastructures- GSN Games, Adult Swim Games, Cruchyroll Games, Rooster Teeth Games, and WB Games- could dominate the gaming space if they decide not to sell all five and merge them all to create one mega gaming business named AT&T Gaming Entertainment.
0Sign inorRegisterto rate and reply
Great to see Microsoft doing great especially in gaming.
0Sign inorRegisterto rate and reply

Sign in to contribute

Need an account? Register now.