The sale of Azure and Xbox services is taking Microsoft to new heights.
At the end of January 2021, Microsoft published a massively positive earnings and sales report in which sales revenues are well above expectations and the Microsoft share is pushing even higher.
The revenue boom is being led by the phenomenal growth of Microsoft's Azure products and cloud services, with Xbox content and related services also making a significant contribution.
Microsoft shows enormously profitable growth compared to the previous year
It's no secret that Microsoft has had a very good year. It's a different matter to see how it is disclosed in the Microsoft Earning Release FY21 Q2 report.
The headlines read:
Microsoft's revenue rose 17 percent to $ 43.1 billion
Operating income rose 29 percent to $ 17.9 billion
Net income rose 33 percent to $ 15.5 billion
The biggest leap in sales is attributable to Microsoft's Intelligent Cloud division, which grew 23 percent to $ 14.6 billion.
The Intelligent Cloud division includes Microsoft's Azure cloud computer and server products, which themselves have grown by a whopping 50 percent. However, since Microsoft Azure does not report revenue in US dollars, this is the only information offered.
Interestingly, Microsoft's Windows OEM sales even rose – albeit 1 percent – with many experts forecasting a slight decline. Revenue from Windows operating systems is included in the More Personal Computing division, which rose 14 percent to $ 15.1 billion.
The More Personal Computing sector also takes into account Xbox sales, content and services. Despite the inventory constraints, Xbox sales and services saw revenue grow 40 percent.
In a call to earnings on sales reports, Microsoft CEO Satya Nadella announced that the Xbox Game Pass subscription service has exceeded 18 million subscribers and has gained three million new subscribers since the previous report in September 2020. Nadella also confirmed that the Xbox Live service is now available to over 100 million active users.
Unfortunately, for those hoping for good news regarding Xbox Series X and Series S stocks, you'll have to wait a little longer.
No wonder Microsoft believes Xbox S / X supplies will continue to be limited in the next quarter
– Brad Sams (@bdsams) January 26, 2021
Despite the huge spike in Xbox and Xbox service revenue, Microsoft is still having problems getting inventory for the new console. There's no end in sight to the inventory delays that will continue to play into the hands of those who use bots and scripts to crawl consoles that make it to retailers.
What's next for Microsoft?
With the sales and earnings report released, Satya Nadella would likely want more of this. During the trials with the COVID-19 pandemic, growth was expected in almost all sectors as more people turn to online services and do business with Microsoft's broad range of products.
The massive growth in Xbox services is not unexpected, even if it has exceeded expectations. With more people stuck at home than ever before, it's understandable to turn to video games. The introduction of a highly anticipated new console to the Xbox Series X has always caused quite a stir, even if it remains difficult to get your hands on one.
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About the author
(699 articles published)
Gavin is the Junior Editor for Windows and Technology Explained, contributing regularly to the Really Useful Podcast, and was the Editor for MakeUseOf's crypto-focused sister site Blocks Decoded. He has a BA (Hons) in Contemporary Writing Using Digital Art Practices Looted from the Devon Hills, as well as over a decade of writing experience. He enjoys plenty of tea, board games, and soccer.
By Gavin Phillips
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