We're probably not alone in occasionally wondering about Microsoft's Game Pass and how they manage to keep it profitable, but the latest figures made it pretty clear.
Microsoft's latest quarterly earnings report had to have been a jolly occasion for the company's gaming division, as its contributions helped the company to a significant milestone.
The time period we're talking about here is the last quarter of 2020, during which the company gaming division surpassed $5 billion in revenue, a staggering 51 per cent growth.
It goes without saying that the launch of Xbox Series X and S played a role, and Microsoft's CEO Satya Nadella said it has been the most successful launch in the company's history, during which they also hit a record number of devices sold in a launch month.
"Game developers are benefiting too as they turn to us to reach more players and scale the games using the power of our cloud. We exceeded $2 billion in revenue from third-party titles this quarter for the first time", he said.
Nadella says they're pleased with the overall growth in consumer subscriptions with Game Pass, which along with Microsoft 365 subscribers makes for a healthy subscriptions base. The company's content and services revenue grew by 48 per cent.
As for the immediate future, Microsoft expects strong engagement and demand for Xbox Series X and S, albeit conceding that supply "will still be constrained".
Instead of taking on Sony at the game of expensive first-party exclusives, Microsoft carved out a different space for itself, one that has paid marvellously and given us Xbox Game Pass. And knowing that Xbox Game Studios are soon getting an industry heavyweight as well, future is pretty bright.
You can find Microsoft's earnings report transcript here .
Halo Infinite, upcoming sequel by 343 Industries and Microsoft
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