New Title: The Rise of Gaming: Xbox Surpasses Windows Revenue at Microsoft
In a surprising turn of events, Microsoft’s gaming division has surpassed the revenue generated by its Windows department for the first time in the fourth quarter. This milestone was largely driven by the acquisition of Activision Blizzard, a game publisher valued at $69 billion.
These findings were revealed in Microsoft’s 10-Q report for the second quarter of 2024, submitted alongside documentation to the U.S. Securities and Exchange Commission (SEC) in the final hours of Tuesday’s session.
Gaming revenues increased by 50%, reaching $7.1 billion, with $2 billion coming from the acquisition of Activision Blizzard. This marks the first time that Call of Duty’s earnings have been included in Microsoft’s revenues.
On the other hand, Windows revenues increased by 9.5% in the quarter, reaching $5.3 billion, mainly due to an 11% growth in the sales of Windows-based computers. However, this was not enough to match the additional income generated by the gaming acquisition.
This achievement comes as a surprise to those who have been following the company’s history, considering how Windows has defined Microsoft over the decades – from the debut of Windows 1.0 in the mid-80s to the success of Windows 95 and subsequent antitrust battles regarding Windows’ position as the dominant operating system for personal computers.
Nevertheless, the deal with Activision simply accelerated a trend that had been emerging for some time. For instance, in the same quarter last year, Microsoft’s Gaming division came within a mere $50 million of matching the revenues of the Windows division.
While boasting privileges alone are insufficient, business ultimately relies on financial results, and from that perspective, Windows still maintains a higher profit advantage over gaming as a whole. For example, Activision’s revenues of $2.08 billion in the quarter translate to a meager $11 million in profit after considering transitional costs of $55 million.
This also explains the recent layoffs in the gaming department.
Microsoft is determined to revitalize its Windows business through the use of artificial intelligence. The company plans to introduce neural processing units, integrate Copilot technology into Windows 11, and introduce a new system key.
“In 2024, artificial intelligence will become an integral part of every computer,” said Satya Nadella, CEO of Microsoft, during the company’s earnings conference.
Meanwhile, within Microsoft’s ranking of business segments, it is possible that Windows will be overtaken by a completely different franchise. LinkedIn achieved over $4 billion in revenue in the quarter and continues to grow steadily.
FAQ:
1. What were the gaming and Windows revenue in Microsoft’s fourth quarter of 2024?
Gaming revenues amounted to $7.1 billion, while Windows revenues reached $5.3 billion.
2. Where did the additional gaming revenue come from?
Some of the additional gaming revenue came from the acquisition of game publisher Activision Blizzard valued at $69 billion.
3. What was the significance of this acquisition for Microsoft’s results?
With the acquisition of Activision Blizzard, the earnings of this Call of Duty publisher were included in Microsoft’s revenue for the first time.
4. What was the growth in Windows-based computer sales in the fourth quarter?
Windows-based computer sales increased by 11% in the fourth quarter.
5. What is the profit advantage of the Windows division over the gaming division?
The Windows division still maintains a higher profit advantage over gaming as a whole.
6. What are Microsoft’s plans for its Windows business in the future?
Microsoft plans to utilize artificial intelligence to revitalize its Windows business. This includes introducing neural processing units, integrating Copilot technology into Windows 11, and introducing a new system key.
7. Which franchise might overtake Windows in Microsoft’s business rankings?
It is possible that LinkedIn, achieving over $4 billion in revenue during the quarter and showing consistent growth, might overtake Windows in Microsoft’s business rankings.
Definitions:
– Acquisition: the process of acquiring or merging with other companies.
– Quarter: a division of the year into four equal parts, lasting three months.
– 10-Q Report: a quarterly financial report submitted by public companies in the United States to the SEC (U.S. Securities and Exchange Commission).
Suggested Related Links:
– www.microsoft.com
– www.activisionblizzard.com
– www.linkedin.com
The source of the article is from the blog mendozaextremo.com.ar