Microsoft shared its Q1 earnings call results on Tuesday evening and although the technology giant saw a slowdown in its cloud growth, the company beat analysts’ expectations with revenue and EPS both exceeding expectations; particularly of interest to Microsoft’s gaming division were the numbers for the Xbox, with Xbox hardware revenue growing 13% overall and gaming revenue growing “slightly” at 4%. The results mark the best Q1 ever for the Xbox with the exact amount of Xbox revenue in fiscal Q1 coming in at $3.61 billion, with a year-on-year growth expectation of about 0.47%.
“We saw usage growth across all platforms driven by the strength off console,” Microsoft CEO Satya Nadella said during a web call on Tuesday. “PC Game Pass subscriptions increased 159% year-over-year, and with cloud gaming, we’re transforming how games are distributed, played and viewed. More than 20 million people have used the service to stream games to date.”
“As we look towards the holidays,” Nadella added, “we offer the best value in gaming with Game Pass and Xbox Series S. Nearly half of the Series S buyers are new to our ecosystem.”
Other important numbers from the report include:
- Revenue: $50.1 billion versus $49.6 billion expected.
- EPS: $2.35 versus $2.29 expected.
- Productivity and Business Processes: $16.5 billion versus $16.1 billion in expected.
- Intelligent Cloud: $20.3 billion versus $20.3 billion expected.
- More Personal Computing: $13.33 billion versus $13.1 billion expected.
Microsoft is currently in the process of being approved for the $68.7 billion acquisition of Activision/Blizzard, a move which would see it gain ownership of such games as World of Warcraft, Diablo and the Call of Duty series. The merger is still in the propositional stages, as Sony has voiced its disapproval of the merger, citing it as one that would give Microsoft an unfair advantage in the console wars, particularly due to its ownership of the massive Call of Duty series.
“Call of Duty is so popular that it influences users’ choice of console, and its community of loyal users is entrenched enough that even if a competitor had the budget to develop a similar product, it would not be able to rival it,” Sony said in a questionnaire answer to the Brazilian regulatory body.
“No other developer can devote the same level of resources and expertise in game development,” the company added. “Even if they could do that, Call of Duty is overly entrenched, so that no rival – no matter how relevant they are – can catch up,” Sony added.
Microsoft has gone on to refute Sony’s claims, claiming that Call of Duty and other Blizzard Activision franchises wouldn’t become immediately exclusive to Microsoft’s Xbox Series S/X consoles or Xbox Game Pass after the merger and that Sony has had exclusivity to several game franchises in previous years of the console wars.
What do you think of the news of Xbox posting its best ever Q1 results in its latest earnings report? Let us know in the comments.