ALL THE LATEST NEWS ABOUT THE BUSINESS OF PC GAMES

News

Microsoft's games business made $10bn in the last year

Microsoft's games business made $10bn in the last year

Revenue from Microsoft's games and services division rose 39 per cent to a massive $10bn in the last fiscal year.

The Big M announced its financials for the 12 months ending June 30th, reporting a $643m rise in games revenue. Xbox games and services increased 36 per cent, based on the strength of third-party titles.

In this day and age, it's fair to assume that a large part of this third-party revenue came from Fortnite.

Gross margin on Microsoft's operating income also increased by $1.1bn - or 21 per cent - partially driven by the company's video games sector.

Games were also partially responsible for a 15 per cent increase cost of revenue. It's possible this is due to research and development on new infrastructure and even the next Xbox console.

Speaking to investors on a call later - as reported by Seeking Alpha - CEO Satya Nadella (pictured) said that games revenue had been driven by Xbox Live, Game Pass as well as its Mixer streaming platform.

"In Gaming, we are pursuing our expansive opportunity from the way games are created and distributed to how they are played and viewed, surpassing $10 billion in revenue this year for the first time," he said.

"We are investing aggressively in content, community and cloud services across every endpoint to expand usage and deepen engagement with gamers. The combination of Xbox Live, Game Pass subscriptions and Mixer are driving record levels of growth and engagement."

Nadella also calls out PlayFab, the cloud-gaming start-up that Microsoft purchased in January of this year. The exec said that this will help the firm achieve its vision for cloud gaming - one which likely ties into what PhilSpencer said on-stage at E3 2018 - that console quality games will be streamable to any device in the future.

"PlayFab accelerates our vision to build a world-class cloud platform for the gaming industry across mobile, PC and console," he said.

"And the addition of five new gaming studios bolsters our first-party content development to support our fast-growing gaming services."


PCGamesInsider Contributing Editor

Alex Calvin is a freelance journalist who writes about the business of games. He started out at UK trade paper MCV in 2013 and left as deputy editor over three years later. In June 2017, he joined Steel Media as the editor for new site PCGamesInsider.biz. In October 2019 he left this full-time position at the company but still contributes to the site on a daily basis. He has also written for GamesIndustry.biz, VGC, Games London, The Observer/Guardian and Esquire UK.