What You Need to Know About Microsoft’s Gaming Business

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Can you imagine what life would be like today without Microsoft? Microsoft helped launch the PC era and has revolutionized our experiences with products and services that are indispensable. Founded by Bill Gates and Paul Allen in 1975, Microsoft has established itself as a household name and one of the most valuable companies in the world thanks to products ranging from the Microsoft Windows operating system to the Surface line of PC devices to the Xbox gaming console.

For the 2018 fiscal year, Microsoft reported revenue in excess of $10 billion from its gaming division, thanks to more than 57 million active Xbox Live users and a range of gaming alternatives from Halo and Forza to online betting with services like Betway88. Let’s take a closer look at Microsoft’s impact on the gaming business.

Earlier this year, Microsoft rebranded Microsoft Game Studios as Xbox Game Studios. Microsoft is also working aggressively to shift to a primarily streaming and subscription model for games, and to expand the sphere of gaming beyond the Xbox console to Xbox-as-a-platform that is hardware agnostic and provides the same experience across the Xbox console, PCs, and eventually mobile devices.

With the number of gamers expected to rise significantly, tech giants like Microsoft are looking at their gaming experiences and trying to establish an advantage over competitors. Estimates suggest that by 2020 there will be two billion people who will be playing video games, and Microsoft wants a share of the market. It’s why even Google recently came out with their own gaming platform—Google Stadia.

How much revenue does Microsoft generate from the gaming industry?

Microsoft is a massive brand of its own, which specializes in a variety of different areas. Therefore, the revenue the company generates is divided into three segments:

  1. Intelligent computing.
  2. Personal computing
  3. Productivity and business processes

During the second quarter of 2019, Microsoft announced that its gaming revenues were up by 8 percent compared to the same period in 2018. This means that Xbox sales subscriptions and services such as Xbox Live and Xbox Gold are doing quite well. It is estimated the software sales and services are up by 31 percent. For instance, it is expected that 61 million people are subscribed to Xbox Live at this point.

Why is Microsoft’s gaming business big in the industry?

The gaming industry has become a battleground for key players who want the most significant share. There are a number of consoles and gaming services, but most of the market basically boils down to the three major players—Microsoft, Sony, and Nintendo. However, it seems that Microsoft has the upper hand because of the amount of revenue it is generating from the gaming segment alone.

When you take a look at Microsoft’s fiscal 2018 you will notice that their revenue increased by 14 percent. In fiscal 2017 Microsoft’s gaming business generated revenue of about $9.7 billion dollars. This means that in fiscal 2018 the income climbed to 10.6 billion dollars.

It seems that things are looking up for Microsoft because fiscal 2019 is not yet over. With less than six months down, Microsoft has already generated 6.97 billion dollars, and Microsoft is determined to ensure its gaming division doesn’t suffer the same fate as Windows Phone. The gaming business is vital for Microsoft’s overall growth.

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About Author

Matt Davidson has a passion for games and online gaming of all sorts--from Pokémon Go to Halo to Warcraft and casino games like blackjack and slots. He also writes about IT and technology in general.