Report: Microsoft's Cloud Business is Thriving, but its Gaming Division is Struggling
How was the second quarter for Microsoft? The answers can be found in the recent report: while its core business segments are looking up, the console division continues to drag along near the floorboards.
The key takeaways from the document:
- Microsoft's revenue for the three-month period ending December 31st was $81.3 billion, a 17% increase compared to the previous year. Net income for the quarter was $30.9 billion (a 23% increase). Special thanks for these results go to Microsoft's cloud services. Revenue from this segment alone surpassed $51.5 billion in the past quarter (a 26% increase). As Microsoft's CFO Amy Hood reported, this success reflects high demand for the company's "portfolio of services."
- The company's gaming division is not to be envied. Xbox hardware sales revenue has been declining for the third consecutive year — in the second quarter, a 32% year-over-year decrease was recorded. Total gaming revenue is also in the doldrums — down 9%.
- The Xbox content and services segment, which includes Game Pass, also had a tough time — the metric decreased by 5%. This result can be linked to stronger performance from internal studio projects last year. Even the recent Call of Duty: Black Ops 7 failed to meet expectations in competition with Battlefield 6 and fell short of the previous installment in the series, Black Ops 6.
- Another interesting tidbit: in the past quarter, Windows 11 reached a significant milestone — 1 billion users. As Microsoft's CEO Satya Nadella reported, the year-over-year growth was 45%. This was largely facilitated by the end of support for Windows 10, thanks to which the new "operating system" reached a billion faster than its predecessor.