What Happened: The Satya Nadella-led company’s gaming division raked in $357 million in revenue in the quarter ended June 30.
Hardware sales brought in more revenue thanks to higher-priced new era consoles. “Xbox hardware revenue increased 172% driven by higher price and volume of consoles sold due to the Xbox Series X/S launches,” as per the company’s earnings release.
Content and services revenue cooled off in 2021 as more people turned away from third-party titles.
Xbox content and services revenue dropped 4% lower to $128 million, which Microsoft attributed to a decline in third-party titles compared to last year that benefited from pandemic-induced stay-at-home scenarios.
The tech giant noted this slump was “offset in part by growth in Xbox Game Pass subscriptions and first-party titles.”
CEO Nadella said at the company’s earnings call, “Game Pass is growing rapidly and it’s transforming how people discover, connect and play games. Subscribers play approximately 40% more games and spend 50% more than nonmembers.”
Why It Matters: “Gaming is the largest category in the entertainment industry,” Nadella said in the earnings call — adding, “we are expanding our opportunity to reach the world’s 3 billion gamers wherever and whenever they play. We are all in on games.”
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Microsoft Corporation (NASDAQ:(MSFT)), Apple Inc. (NASDAQ:AAPL) – Microsoft Says It’s ‘All In’ On Games As Xbox Sales, Subscription Growth Offset Post-Pandemic Impact In Q4
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