Microsoft reports strong Q4 2018 earnings, record-breaking Xbox revenue


Microsoft generated over $30 billion USD in revenue during the fourth quarter of 2018, the company announced in its most recent earnings report.

This marks a 17 percent year-over-year increase in revenue. Microsoft cited strong performance in its cloud and Xbox gaming divisions as major contributors to the increased revenue.

The Xbox brand in particular experienced significant growth, surpassing $10 billion (up 14 percent year-over-year) in revenue throughout the year for the first time.

Microsoft doesn’t reveal console sales figures, so it’s currently unclear how many Xbox One S and Xbox One X systems were sold during this quarter.  However, the earnings report states that the number of active Xbox Live users rose to 57 million, up 4 million year-over-year but below the 59 million posted in the second and third quarters of 2018.

Xbox revenues as a whole rose 36 percent during this quarter, although Microsoft attributed the increase primarily to major third-party gaming releases. Microsoft has often been criticized for lacking first-party exclusive Xbox games, areas where competitors PlayStation and Nintendo have had great success in. Xbox head Phil Spencer noted this is an area of focus for the company in an interview with Gamesbeat earlier this year.

As part of this effort, Spencer took to the stage at E3 2018 to reveal the creation of a new Santa Monica, California-based Microsoft first-party studio called The Initiative. Further, the company announced the acquisition of four additional gaming studios, including Montreal-based Compulsion Games.

“In gaming, we are pursuing our expansive opportunity — from the way games are created and distributed to how they are played and viewed, surpassing $10 billion in revenue this year for the first time,” Microsoft CEO Satya Nadella said in an investors call.

“We are investing aggressively in content, community and cloud services across every endpoint to expand usage and deepen engagement with gamers. The combination of Xbox Live, Game Pass subscriptions and Mixer are driving record levels of growth and engagement.”

Microsoft’s financial report also notes that its intelligent cloud revenue was $9.6 billion USD for the quarter, marking a year-over-year increase of 23 percent. Its Azure service in particular saw growth of 89 percent in the fourth quarter.

Source: Microsoft