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Microsoft's Gaming Revenue Grows by 18%; Xbox Software and Services Revenue Up 24%

Microsoft released its financial results for the third quarter of fiscal year 2018, providing an update on the performance of the Xbox business.

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darthv72177d ago

I guess Phil had a point when he said something to the effect of there is potentially more $$ to be made off MP gaming and services than SP games. Less risk and more reward.

I may not agree with that way of thinking but there is something to be said about an increase in revenue.

Abriael176d ago

Well, it does say that it mostly comes from third party games, so I'm guessing PUBG is a big factor.

Eonjay176d ago

The biggest benefit of being a platform holder is collecting platforming fees. They haven't spent much money on making new games and on top of that they just launched a new service.

bolimekurac176d ago

one game isnt affecting the whole picture that drastically, yes pubg did extremly well , its the whole spectrum of things that are doing well and bringing in money

176d ago
neutralgamer1992176d ago

abriael

it has to be from 3rd party because ms doesn't make enough games to warrant that much growth

Septic176d ago

Lol the reports have been manipulated....okay....nothing will ever be good enough. Always some outlandish excuse...

Mr_Wilson176d ago

Gamerzero clearly has no idea what "revenue" means. How embarrassing for him :(

x_xavier_x176d ago

@gamerzero

So, are we to understand that you are accusing MS of intentionally committing fraud by manipulating expenses? Financial statement fraud, which is actionable under the Sarbanese Oxely Act, among others, is a felony which carries a penalty of up to 10 years in prison and significant monetary fines. Perhaps you should alert the proper authorities of your startling findings. /s

These armchair executives on N4G crack me up. I'll wager that most of them have never even held a job.

sinspirit176d ago

@x_xavier_x

They did the same thing with Zune. They combined Zune sales with all media services and said it was successful. But, they didn't report the actual sales numbers and profits of Zune specifically. You can move product categories around and take advantage of it without illegally misleading.

Also. Revenue and profit are two different things.

One way or another, most of Microsoft's unsuccessful products were merged with Windows services to appear successful, because that is their only truly successful market.

Abriael176d ago

@gamerzero: i would suggest having evidence before making this kind of accusations, considering that manipulating financial reports is a federal criminal offense.

So, do you have any evidence?

x_xavier_x176d ago (Edited 176d ago )

@sinspirit

Financial statements are not broken down into line items for specific products. You will not see sales figures for toasters in General Electric's quarterly income reports. So its no surprise to hear that Zune sales numbers were not included in MS financials.

Fragnum176d ago (Edited 176d ago )

@Gamerzero

***"The thing is Microsoft's financial reports are totally manipulated and misleading"***

Just as on this article in literally the first comment you found VGchartz sales figures "Questionable"

http://n4g.com/news/2165041...

It appears to me that there's more than a few users here happy to get in quick and stick the boot in on Microsoft and the Xbox brand even when they're doing things right, that don't want to see the Xbox brand do well.

The same users that claim that Game Pass is bad for the consumer, That nobody wants or needs older games with backwards compatibility, The same users that argue there is no need to buy an Xbox because they can play Xbox exclusives on PC and are now arguing in this article that people are logging in to live on both PC AND Xbox and that this is inflating live numbers. The same users that even when time and time again we see the X out perform the Pro in Digital Foundry comparisons that somehow the Pro is the better hardware to buy. For exclusive games it may be, but it most certainly is not the case for third party releases, which are the majority of titles released.

For months now Xbox along with Nintendo's Switch has seen strong Year on Year sales growth as per the article linked, so even without validating the figures above I think it is entirely realistic that Xbox has seen the increase in profits stated in the article.

Xbox has done many things wrong this generation and there's no doubt that this has cost them millions in lost revenue, but Xbox IS doing many things right - NOW. This is being noticed by the average consumer and this IS driving sales.

The opinions we see daily seen on N4G are not always consistent with the sentiment across the rest of internet,

https://www.resetera.com/th...

The positive press Xbox has been getting for months means that the Xbox brand is slowly clawing back the goodwill of the community and only the most blinkered cannot see it, all the disagrees and negative comments in the world won't change this.

badz149176d ago

So...I guess this is a reason for celebration for the xbox camp ha? increased revenue for MS but hardly anything worthwhile coming from them game-wise.

yup...those GAAS and Gamepass are sure "for the gamers" reason, riiiight.... maximum profit for minimum effort. great job MS!

bouzebbal176d ago

Haha so they will follow the trend of no exclusives..
No surprises expected at e3 then. No need to change the model if they are profiting from it

+ Show (11) more repliesLast reply 176d ago
lxeasy176d ago (Edited 176d ago )

Yeah the pubg deal is huge for them as well as the Xbox One X. Glad to see they are doing well but I don't think we'll never see a SP exclusive from them ever again. I love me amazing sp adventures like Dragon Age Inquisition and Witcher 3.

Lennoxb63176d ago

There are literally SP exclusives being released this year.

timotim176d ago

I wouldn't say that. Ashen, Ori 2, Below, State of Decay 2, Crackdown 3 all have SP modes...in fact, most of these games are SP first games.

Godmars290176d ago

@Lennoxb63:
But is MS making them, or have they only licences them?

Kavorklestein176d ago

Good growth and sales look good to investors. This is decent news for Xbox as a brand.

To address the issue of SP titles...
I literally LOVE ALL kinds of games.
I do wish I had more AAA SP Exclusives to pick from on Xbox, but I also have 230 games ready on my Hard drives.

I'm honestly all set to have tons of fun no matter what does or doesn't get released.

P.S. (Anyone reading this) Please do not try to manipulate or hybrid-ize my comment to mean that I'm OKAY with the lack of AAA SP Xbox exclusives in general... cuz I'm not okay with it.

However, I AM NOT as phased by it
as the concern trolls around here WANT me to be.

+ Show (1) more replyLast reply 176d ago
Bathyj176d ago (Edited 176d ago )

No one's saying that's not good business. It's just not good for gamers. I would wager a list of the 100 best games of all time would be predominately single player experiences. They're the games that stick with you and become part of your gaming soul. MP games are just games. And people are always just looking for the next hit. There are exceptions of course.

And that's why Microsoft will never change. It's not effecting their bottom line. They're good business men. Just not a good games company.

morganfell176d ago

Gold star for that last paragraph.

slate91176d ago (Edited 176d ago )

"MP games are just games. And people are always just looking for the next hit."
Those are a couple of terrible sentences there. Stop pushing your opinion as fact. There are plenty of MP only gamers who wouldn't be so heavily involved in video games if it wasn't for MP. Me being one of them.

Xavi4K176d ago

On the other hand most single player games have very short life cycle comparing to Mp games for example I got platinum trophy in Yakuza zero Wii did all the missions and side quest and it only took me around 38 hours vs over 1100 hour I put in battlefield game.

Jinger176d ago

Yes because no one has precious memories of having friend over and doing lan parties of goldeneye, mario kart, counter strike etc. Nope. MP games are just games not worthy of memorable moments in our lives /s

ImGumbyDammit176d ago (Edited 176d ago )

@FrescoVivir

You sure got a great return on your investment with Battlefield. (assuming you spent $60/game) That means it cost you around $1.57/hour to play Yakuza 0 and slightly more than .05 cents per hour playing Battlefield. Cudos to you. I can never get that much into a game. Wish I could. The best I probably have done is spend about 200 hours playing Halo 5 this generation. I usually put about 50-60 hours in a good MP before I move on (sometimes I will come back). I did that quite a bit (return after a few months later) with both Titanfall, Destiny Forza Horizon 3.

Bathyj176d ago

Yes Jinger. Those would be the exceptions I mentioned. I'm glad you mentioned those games because MP died for me with split screen. Actually competing with your friends, not some loud mouth kid in Delaware.

And while I loved those games and had a great time, none of them an create an experience or memory you'll still cherish a decade later, like slaying your first Colossus, or taking on a metal gear.

I'm well aware SP games don't last as long, but that's probably why they're not as easy to exploit with microtransactions. I guess I should thank you guys. The money they can milk out of one game over the course of a year probably helps fund the more meaningful games I like. Games you'll think about for years, even if you only played it once.

I'm not saying you guys shouldn't enjoy those games. They're just not the same experience, and you won't see many MP shooters or the latest thing battle royal getting any game of the year awards.

They're all so me too, trying to be the next big thing, instead of just setting out to be a good game. Look at call of duty, a series everyone said they hate but keep buying it. Going battle royal cos someone else had some success and dumping SP. Meanwhile the best moment in that whole drawn out series wasn't a kill streak you got or calling in an air strike, but storming the beach in Normandy. I still remember that like it was yesterday.

That's why I play games. But each to his own.

Bathyj176d ago (Edited 176d ago )

Sorry guys. I'm not trolling you. It's just something as a gamer I care deeply about. I think consoles going online has done more harm than good.

SP gets a back seat, games are released unfinished and get patched, microtransactions are so rampant that developers have to come out and make a big deal about not having them. all the while the only thing I was actually excited about with going online, ie getting demos, is almost non-existent.

DiRtY176d ago

I prefer multiplayer games. Not just from Microsoft, but in general.

Warcraft 3, Command & Conquer Red Alert 2, Halo 2 - 5, Counter Strike 1.6 / GO, FIFA did change the way I play games, because of their multiplayer modes.

And when you ask, which games are the most popular ones today, you will probably hear a lot about Fortnite, PUBG, League of Legends, Dota 2, Counter Strike GO, Minecraft and maybe Overwatch. All of them just because of their multiplayer.

What about eSports? Easily the gaming aspect with the biggest growth. 25.000 people in one arena cheering for their team to win. You won't find that for any single player game.

I don't follow this new mantra here on N4G that single player games are somehow superior than multiplayer games, just because Sony provides them while Microsoft provides more multiplayer games.

Btw: SEA OF THIEVES was the best selling Rare game since 1995.

176d ago
+ Show (6) more repliesLast reply 176d ago
MorpheusX176d ago

@darthv72

How do u explain the wide Gap between revenue of the PS4 platform vs the Xbox 1 platform of multiplayer/Services focus?

Microsoft growth may be up this but compared to what?

So by what standard are we measuring Microsofts growth by?

If you look @ that PS4 platform which is the lead console this Gen by a very far measure & is the runaway winner, with it's focus on gamers 1st, what gamers want/expect, which is AAA single player experiences in abundance, followed by & leveled out with multiplayer expierences also......

Then how successful is Microsoft in reality? Let's not ignore all the justified ire Microsft has encurred this Gen, why?

Simple, there focus is on Services & Multiplayer, & that's not what the majority of Xbox platform users ask for or expected.

Yes , Xbox platform users enjoy multiplayer, but equally want AAA exclusives.

So again, by what standard are we measuring Micorsofts Xbox1 growth this year?,

Against itself? Yes, because if we measure it by against the lead platform this Gen in Sonys PS4, then it's continuing to do a piss poor job of giving it's consumers what they asked for & expect.

The facts remain, until Micorsoft gets it's AAA exclusive situation up to snuff, the Gap between Sonys platform/focus & approach vs Micorsofts platform & approach, will continue to widen....

right on into next Gen even.

And I imagine, when next Gen comes around 2020, if this is still Micorsofts approach of measuring it's growth by comparing itself against it's own low standards, focusing on Services/Multiplayer, more Xbox platform users will jump ship to Sonys Platform PS5, not wanting to endure another Gen of big talk empty promises & very few AAA single player experiences produced in-house.

darthv72176d ago (Edited 176d ago )

Your guess is as good as anyones man. I dont get it either but how its growing and yet they havent been releasing new games is beyond me.

Congrats to them I guess.... like I said. I dont agree with how they do it but its producing results for the investors it seems.

ShottyatLaw176d ago

Of course its growth is measured against itself. That's kind of how these things work. It's an earnings report...no need for the rant.

Hopefully they see their success as something to build on. Look at the good things leading to growth, look at their competitor's successes, and strive to grow even more by incorporating their competitor's successful moves into their own strategies. Pretty simple on paper.

But, no, it makes zero sense to report its growth compared to a competitor. They're on pace to potentially crack 10b in revenue this year in the gaming division. Those are great numbers, but more is always better. Let's hope that in striving to hit 20b, they start pushing out new games.

Lennoxb63176d ago

"what gamers want/expect, which is AAA single player experiences in abundance, followed by & leveled out with multiplayer expierences also......"

No that's what you want and expect. Xbox needs games period regardless of whether they are MP or SP. It'd be best if MS focused on MP cause they aren't good at SP. Just like Sony isn't good at MP.

gamer7804176d ago

I think we are to a point when there is a lot of risk on multiplayer only games with the competition out there, we've seen a lot of them crash and burn. I think the risk is not knowing your audience and listening to your fans whether its a single player or multiplayer game.

darthv72176d ago

In either case of a game succeeding or failing (in terms of MP games competition)... MS is still raking in the service fees so to them its low risk high reward.

gamer7804176d ago

short term gains, but long term I think it might hurt the brand

CaptainObvious878176d ago (Edited 176d ago )

Congratulations xbone fans...

MS have done a very poor job of releasing exclusives, with this year being arguably their worst this gen, and thanks to all your blind spending you've enabled them to significantly increase their revenue.

So of course MS will continue on their current path. So congrats, you won't be getting any meaningful, deep gaming experiences that aren't riddled with shallow multiplayer and MTs ever again.

timotim176d ago

You think this year is worse than last? Really? Imo, thing are improving a great deal.

Jinger176d ago

You're a poor Captain Obvious if you are saying this year is their worst year.

bluefox755176d ago

Great for shareholders, I dunno about gamers.

gapecanpie176d ago (Edited 176d ago )

Xbox is making a profit and that's all that ms really care about .... The Xbox brand is going no where... The whole console war childish nonsense is for ret**ded fangirls that can't afford the most powerful (console) system....

mark_parch176d ago

this is great news. now they need to start investing that money back into first party games

Jakens176d ago

The agrees see your comment with an objective thought process. I like your comment.

343_Guilty_Spark176d ago

Of course he had a point when the data is right in front of him.

But they still need more balance. They need SP only, MP only, and games with both SP and MP.

176d ago
+ Show (8) more repliesLast reply 176d ago
FallenAngel1984176d ago

“We learn that gaming revenue increased by 18% on year-on-year basis, driven mostly by a 24% growth of revenue generated by Xbox software and services, mainly coming from the strong performance of third-party games.”

Mostly from third party software you say? Gee what a surprise 🙄

“Xbox Live monthly active users also grew 13% year-on-year to 59 million, while the figure remained essentially flat from the latest quarter (which is fairly impressive since no decline from a Holiday quarter is quite a feat).”

Still lower than the 65 million active users that PSN had in April 2015.

darthv72176d ago (Edited 176d ago )

And yet neither seem to clearly define the breakdown of what active monthly users actually means. We know there is a percentage on both services who take the free ride instead of the paid lane when it comes to using the service.

Before the PS4, online was free so I'd imagine more people have signed up for + on the PS4 since it came out due to needing it to play online. Just like how gold is needed to play online for xbl. Neither service do you need to be a paid member in order to browse their respected storefronts or use other services like youtube or netflix.

Active could simply mean users who sign into the service for just such occasions and not those who are full paid subscribers to the online MP access......?

176d ago
FallenAngel1984176d ago

If you want to compare subscribers, Sony last revealed in Jan 2018 that PS+ had 31.5 million users.

I’ve looked all over the internet but can’t find the last time Microsoft revealed how many XBLG subscribers there are in recent times. Anytime they ever talk about the service they only ever mention the amount of MAU, so that’s the only thing anyone can compare at the moment.

nativegoku176d ago

sony had less than 30 million active users last quarter

Aenea176d ago

That's incorrect tho, last numbers known are 70+ million and those are a year old. In the coming weeks they probably release the latest numbers for the past fiscal year...

Aenea176d ago

Haven't seen the active users amount yet, but they did release the number of PS+ subscribers, 34.2 million.

And we all know not everyone is subscribing to PS+ and can still be counted as an active PSN user, same way as MS does...

So yes, you're wrong and it's funny that Xbox fans don't want to believe it seeing the agrees/disagrees on both our posts! :)

FallenAngel1984176d ago

Where are you getting your info cuz Sony didn’t even reveal their MAUs last quarter.

https://www.prnewswire.com/...

Last time Sony talked about MAUs it was May 23, 2017 and the total was at 70 million.

https://www.sony.net/SonyIn...

Don’t tell me that wherever you got your info that you somehow think PSN’s MAU got cut in half, especially when PS4 was blowing sales records last year.

NatFanBoyRestricted176d ago

Yet Sony makes most of the atrocious 3rd party deals

Jinger176d ago (Edited 176d ago )

How is PS4 outselling Xbox 3:1 yet it's only up by 6million users?

Edit: nvm saw the date

VINNIEPAZ176d ago

I swear you ppl walk around with pie charts and number graphs about all things video game sales lol. Jesus ppl

+ Show (3) more repliesLast reply 176d ago
PhoenixUp176d ago

Still no hard hardware or software numbers.

This is a complete 180 from the Microsoft of last gen, among their various other 180s.

176d ago Replies(9)
Madmoose176d ago

Come on man, let's not do this. I mean if that's the case we could go back & talk about how sony pulled a complete 180 on rumble when they were going through the motions over that. Which is anong2 other things that didn't come to fruition or became less of a priority to them. Every company has their things they have to revise and maybe even go back on. So let's not start the singling out game. As we can all find something it didn't come to fruition from pretty much any company. And it all just leaves to a road to nowhere.

PhoenixUp176d ago

According to that chart which i assume is based off VGC Xbox One sales have been on the decline since 2016 and that’s the year XO S released and slimline models are supposed to always dramatically increase sales.

You’d think that with all this talk and hype for the Scorpio/XO X that this would it would dramatically change things the moment it released, but apparently it actually sold less in 2017 than it did in 2016 & 2015.

Fortunately for Microsoft in 2018 Xbox One seems to be performing better than its ever been in the same timeframe of the year in a long while. However when compared to what Xbox 360 sold during the same time during its fifth year that’s not saying much.

gangsta_red176d ago

Man, the armchair financial investors at N4G were wrong again!?

How does this keep happening!

DJStotty176d ago

still banging that 180 drum i see

+ Show (2) more repliesLast reply 176d ago
DarkVoyager176d ago (Edited 176d ago )

“Microsoft's Gaming Revenue Grows by 18%; Xbox Software and Services Revenue Up 24%”

“mainly coming from the strong performance of third-party games.“

The revenue increase was from 3rd party? Can’t say I’m not suprised since they have no compelling exclusives.

URtheWalrus176d ago

It also shows how important "exclusives" really are.

meka2611176d ago

Actually it doesn't since they still made profit. I agree they need exclusives, but this doesn't prove it.

176d ago
Sunny_D176d ago

It shows indeed. Hence why Switch will pretty much surpass the Xbox One install base of 4+ years within a year and make it dead last.

Jinger176d ago (Edited 176d ago )

@sunny

How can the switch make the Xbox one dead last when they aren't even fighting in the same gen? For this gen the Wii U is dead last, we'll see when the ps5 and nextbox comes out if the switch stays on top.

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Madmoose176d ago

And I can guarantee you that only fanboys, haters and the like are the only ones that care. They are one of the biggest and most profitable companies in the world. Do you really think that they give a damn where the bucks are coming from, just so long as they are coming in? Lol I know I wouldn't. If I could get paid triple the amount of money for doing half the work or even better you doing most of it, do you really think I would care how all that money got on my paycheck?

shaggy2303176d ago

@DarkVoyager.

Your making blind statements about Microsoft profits coming from 3rd party games, pretty sure that Sony's financials will look very similar.

Sony gets money for every game sold, you really think that exclusive games outsold 3rd party games?

I agree that games like God of War, Spiderman, The Last of Us etc. are great games, but all of them combined will not be more than all of the 3rd party games sold combined.

TheColbertinator176d ago

Most of the games I got in the past two years for Xbox were multiplatform. So I can see why MS banks on those.

SuperSaiyanGod41176d ago

It's not just Microsoft benefitting off this, EA, Activision, etc. etc. There is nothing wrong with trying to get money but it sucks seeing consumers let it happen and we who support them are to blame.

Anyone else notice Activision coming out with 2 titles last year with cod and destiny 2 and they haven't done crap with any of the marvel heroes all that time they had the license for marvel games? Instead of bringing out new games they put all their support and money into those 2 titles and made around 7 billion off of those 2 games.

Reason i bring this up, is I'm afraid with the success of fortnite and pubg and sea of thieves, Microsoft seems to be heading this route. I really hope it's not the case but if e3 doesn't show what we want from Microsoft, they may be heading that route.