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Microsoft: "It was a breakthrough quarter for gaming"

Xbox significantly boosted by global lockdown.

Microsoft has seen remarkable financial results from gaming during its last quarter, fuelled by the global lockdown.

Satya Nadella sounds happy with Xbox.

"It was a breakthrough quarter for gaming," Microsoft boss Satya Nadella said.

"We saw record engagement and monetisation, led by strength on and off-console, as people everywhere turn to gaming to connect, socialise, and play with others."

Nadella said Xbox Game Pass is seeing record subscriber growth across both console and PC, and pointed to Minecraft, which reached a new high of nearly 132 million monthly active users during the quarter ending 30th June 2020.

Gaming revenue increased by $1.3bn or 64 per cent, which was "significantly ahead of expectations", Amy Hood, chief financial officer, said. Xbox content and services revenue increased $1.2bn or 65 per cent, with strong growth in third-party transactions, Game Pass subscribers and Minecraft. What Hood called "play-at-home scenarios" - aka the global lockdown due to the coronavirus pandemic - resulted in a significant increase in console sales. Xbox hardware revenue increased 49 per cent, primarily due to an increase in volume of consoles sold.

Looking ahead, Microsoft is setting itself to release the Xbox Series X console in time for Christmas 2020. The company said it expects revenue growth in the high teens with continued strong user engagement across the platform.

There was a lot of talk of Microsoft's Game Pass strategy during the financial call, too. "That's what we are going for," Nadella said.

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But Microsoft is also thinking beyond Xbox consoles, with its Project xCloud streaming tech poised to become a part of the Xbox Game Pass offering.

"We go beyond the console to the PC," Nadella said. "We go to mobile and we have the streaming service. So, all of these accrue to what we think, in the long run, is going to be a much bigger addressable market. And we have a great structural position. We have a social networking Xbox Live. Obviously, we have our store that monetises super well, as well as we have the Game Pass subscription."

"I think we're all pretty excited," Hood added. "I think Satya called it pivotal. I think it certainly is, and that we're sort of looking forward to the next console release as well."

All smiles at Xbox then, ahead of this evening's crucial Xbox Series X game showcase.

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