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Sunday, June 16, 2024

Microsoft CEO: Gaming ‘Resilient’ During Economic Uncertainty

  • Microsoft posted $50.1 billion in revenue in fiscal Q1, an 11% increase year-over-year.
  • Its Xbox content and services business saw revenue decrease by 3% during the quarter.
Microsoft

Video games have become a bright spot for Microsoft amid challenges within the tech industry. 

“It’s proven over years, at times of economic uncertainty for families, gaming is somewhat resilient to those issues,” Microsoft Gaming CEO Phil Spencer said

Microsoft proved itself in 2008 during the global financial crisis when it recorded its Best Calendar Year on record for Xbox sales after it cut prices to compete with Nintendo’s Wii.

Microsoft’s latest earnings report backs up Spencer’s statement. 

  • Microsoft posted $50.1 billion in revenue in fiscal Q1, an 11% increase year-over-year.
  • Its Xbox content and services business saw revenue decrease by 3% during the quarter.
  • Microsoft offers its latest generation of consoles for $499 (Xbox Series X) and $299 (Series S).
  • It subsidizes the cost of the consoles from $100 to $200 per unit. 

The gaming industry took a step back in the first half of this financial year following a surge of interest and spending at the height of the pandemic, mostly due to the ongoing chip shortage and supply chain disruptions. 

Road Block

In January, Microsoft announced plans to acquire Activision Blizzard for $68.7 billion, making the tech giant the world’s third-largest gaming company by revenue. 

The all-cash deal has been investigated by the Competition and Markets Authority — a U.K. antitrust watchdog. The CMA detailed concerns over the deal harming Sony’s PlayStation subscription offerings and the streaming business of rivals Google, Amazon, and Nvidia.

As a result, the deal was not initially approved by the CMA and has been sent to a second review stage.

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