New Title: Microsoft Gaming Division Achieves Record-Breaking Results Despite Employee Layoffs
In an unexpected turn of events, Microsoft’s gaming division has reported record-breaking results for the second quarter of 2024, despite recent layoffs of 1,900 employees, including many from Activision Blizzard. This comes hot on the heels of the completion of the acquisition process. Furthermore, Microsoft’s esports team has also undergone downsizing, leaving only 12 members in the team.
The financial report released by Microsoft highlights the impressive performance of its gaming division, which now encompasses revenues from Activision Blizzard for the first time. Surprisingly, Microsoft Gaming, along with the Xbox brand, has surpassed Windows and is now the third-largest component of Microsoft’s business, trailing only behind Microsoft Office and cloud-based services.
Microsoft reported revenues of $62 billion and a net income of $21.9 billion in the second quarter of 2023. These remarkable results have propelled the company’s market value to $3 trillion for the first time. However, at the time of writing, Microsoft’s stocks have declined by 0.28%, currently trading at $408.59.
While most of Microsoft’s products and services have experienced year-on-year growth, device sales revenues have decreased by 9%, returning to pre-pandemic levels. The standout performer, however, is the Xbox brand, which has witnessed an impressive 61% increase in content and services revenue compared to the previous year.
The CEO of Microsoft, Satya Nadella, revealed that Xbox Game Pass had achieved “record-breaking results in the number of subscriptions added in a single day” following the release of the game Starfield in September 2023. He also noted significant progress in cloud gaming, with a 44% increase in the number of hours players streamed Microsoft titles over the past year.
Microsoft’s gaming division contributed $7.11 billion in revenues, becoming the company’s third-largest revenue source, surpassing Windows, which generated $5.26 billion. However, it is still far behind the $13.47 billion from Microsoft Office and cloud services, as well as the $23.95 billion from server products, which experienced a 22% growth.
Amy Hood, the CFO of Microsoft, expressed her expectations for further growth in the gaming division following the acquisition of Activision Blizzard. This will undoubtedly come as a blow to many former employees who unexpectedly lost their jobs earlier this month, despite contributing $2 billion in revenue for the company.
Despite the anticipated growth in content and services, estimated to be in the forties for the next quarter, Microsoft foresees a decline in console sales. The CFO stated that this is due to a weaker console market, which saw only a 3% growth during the holiday period, despite aggressive promotions and offers for the Xbox Series X, which is currently lagging behind the PlayStation 5 in sales, with a ratio of 1 to 3.
For more fascinating insights from the gaming industry, check out an article discussing Tencent’s concerns about the future of gaming.
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The source of the article is from the blog anexartiti.gr