Microsoft has revealed its most recent revenue earnings, and the Xbox has posted big numbers. 2020 was set up to be a big year for Xbox, and the numbers have proven that that was the case.
Microsoft Corp recently released its fiscal year second-quarter results for the quarter ending December 31, 2020. These results are compared to the corresponding period of the last fiscal year. Overall, the company did quite well. Revenue was at $43.1 billion, an increase of 17%. Operating income increased by 29% to $17.9 billion. Net income was at $15.5 billion and increased 33%. And diluted earnings per share increased 34% at $2.03. In many ways, Xbox led the charge, however, perhaps thanks in part to the successful launch of the Xbox Series X/S.
Microsoft pushed hard in 2020 for a big launch of the Xbox Series X/S. Through big Xbox ad campaigns, Xbox Game Pass, and of course the next-generation consoles, Xbox content and services revenue increased 40% year over year. That is a massive difference from 2019. Of course, a new console will do that, but Microsoft is likely happy with these numbers.
A part of the reason to be satisfied is that the demand for the Xbox Series X/S is still very high. In fact, the Xbox Series X/S still sells out the moment it hits shelves. While that may not be the best thing for consumers, it proves that fans are still wanting the consoles and that the revenue will still come in, likely, in Q3 and beyond for Microsoft's fiscal year.
Head of Xbox Phil Spencer says that the team is constantly making more Xbox Series X/S consoles, so eventually, there will be enough consoles so that anyone can simply walk into a store and buy one, or order a console online. The question will then be — once the high demand of the launch window is met — will Xbox content and services still meet high marks for revenue.
What could help with revenue is Xbox Game Pass, a service that apparently is built to make the company money. Many wonder how such a deal for the consumer can be a win for Microsft and Xbox as well, but Phil Spencer and leadership have often doubled down on it being a win-win proposition. Recently Microsoft tried to up the pricing of Xbox Live Gold, but quickly backtracked on that after backlash from the fans. It would not be a surprise if the pricing structure of Xbox Game Pass were to rise eventually, even if just ever so slightly.
Source: Microsoft