Microsoft reported its results for the fourth quarter of its 2015 financial year, and while the company made a gargantuan loss, Xbox and the division it sits in made a tidy profit.
Microsoft generated $22.2bn in revenue for the quarter ended 30th June 2015, but it made a loss of $2.1bn because of the eye-watering $7.5bn charge related to its £4.6bn purchase of the Nokia phone business, its recently-announced restructuring drive, which costs $780m, and a $160m charge related to its restructuring plan. That's a lot of costly restructuring.
Earlier this month Microsoft announced plans to cut 7800 jobs over the next several months as part of an overhaul of its phone business. Microsoft's Windows Phone has struggled to compete with Apple and Android devices in the smartphone space, and its September 2013 purchase of Nokia's mobile phone business hasn't had the desired effect.
Xbox, though, appears to be doing well enough to keep the bailiffs from the door. Total Xbox revenue grew 27 per cent based on "strong" growth in consoles, Xbox Live transactions and first party games, Microsoft said.
Xbox Platform revenue increased 10 per cent to $86m, driven by higher volumes of consoles sold, but offset in part by lower prices of Xbox Ones sold. That'll be all those price cuts.
Microsoft said it sold 1.4m consoles in the fourth quarter, compared to 1.1m consoles during the prior year, but it failed to specify how many were for Xbox One and how many were for Xbox 360. Most will be for Xbox One though, given Xbox 360's veteran status.
Xbox financials are included in Computing and Gaming Hardware, as Microsoft calls it, which saw revenue increase $591m or 44 per cent. But this includes Surface, which is doing wonderfully well, with revenue growth of 117 per cent to $888m. That's Surface Pro 3 and Surface 3 launching.
Computing and Gaming Hardware is a part of Microsoft's Devices and Consumer division, and there's a "D&C Other" part of that (still with us?) that saw revenue increase $538m or 31 per cent, mainly due to higher revenue from Xbox Live transactions, search advertising, first-party video games, including Minecraft, and Office 365 Consumer.
Breaking it down, Xbox Live transactions revenue increased $205m or 58 per cent, reflecting "increased users and revenue per user". Xbox Live users grew 22 per cent in the quarter, logging nearly 3.5bn hours of gameplay.
First-party video games revenue increased $63m or 62 per cent, most of which is down to Minecraft, which Microsoft bought in November 2014.
The lines on the chart are going up, then, but is Xbox doing well enough for Microsoft? Microsoft CEO Satya Nadella said Xbox "had an incredible Q4".
The revenue growth of 27 per cent, coupled with "the excitement we generated at E3 with Xbox exclusive gaming content and backwards compatibility demonstrates the building momentum that exists within the Xbox ecosystem", Nadella added, so he sounds happy ahead of the launch of new operating system Windows 10.
"Gaming is an important scenario for Windows 10, and our success with Xbox this quarter gives us a strong starting position heading into launch," he added.
"Our growing fan base is excited for the best games lineup in our history. All of this comes together with Windows 10, when fans can connect with each other, stream all of their Xbox One games to Windows 10, and experience the best virtual reality platform given our partnership with Oculus Rift and Valve."
Nadella added he expects Xbox to continue to grow "both fans and profitability" as it heads into the crucial Christmas period and the launch of Xbox One exclusive Halo 5.
Of course, despite Xbox One's gains, it still lags behind Sony's PlayStation 4 in the console war. PS4 has shifted 22.3m units as of 31st March 2015. Microsoft has yet to report an updated sales number for Xbox One.
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