Xbox Game Pass starting to pay off as gaming revenue had best quarter ever

Xbox Game Pass is starting to pay off for Microsoft, at least that’s according to a report by gamesindustry.biz. As noted in the report, Microsoft CEO Satya Nadella said that this is the “largest gaming revenue quarter” in Microsoft’s history, as part of yesterday’s earnings call.

In a three-month period that ended on December 31, 2018, Microsoft earned revenue in the amount of $4.23 billion from its Xbox games, which is a 8% increase in revenue from last year. Most of the revenue increase came from Microsoft software and services, including a 31% increase in sales revenue from third-party games sales, Xbox Game Pass and Xbox Live Gold subscribers.

Nadella commented on the revenue increase in represented “the highest number of mobile and PC users to date.” Nadella added that Microsoft sees a positive outlook for gaming on Xbox and other platforms.

“Our investments in content community and cloud services across every endpoint drove both record user engagement and record average revenue per user and contributed to our largest gaming revenue quarter ever, driven by software and services. Xbox Game Pass subscribers and Mixer engagement also hit new all-time highs.”

Also in the second quarter, Microsoft bought two more game studios, Obsidian Entertainment, and inXile Entertainment. In all, Microsoft now has 13 internal game development studios. In the last six months, Microsoft more than doubled its first-party game content capacity for Xbox One and Windows 10 PCs. Since Sony will not be attending E3 2019, Microsoft hopes to continue to gain revenue in the next year with gaming on Xbox and Windows 10. Stay tuned.