Microsoft’s Latest Earnings Boom Driven in Part by Video Games

To call 2020 a strange year might be somewhat of an understatement. With COVID-19 wreaking economic chaos across much of the globe, it is hard to believe that anyone is “doing well” from a revenue standpoint right now.

But there has been one boom during the world’s collective shut-in saga, and that is the video game industry. Not only is it posting record revenues and profits but also the current growth trajectory puts it on pace to displace more traditional titans of entertainment.

The only question is whether any of this will last once people are allowed to socialize again. Analysts with some history of hitting things right on the head when it comes to predicting the often wild ride that is the video games industry say that growth will not only continue but accelerate.

Perhaps that’s why Microsoft was more than happy to take a long-term bet on gaming way back in the Gates era with its Xbox. Now they’re reaping the profits of that foresight as Redmond’s latest earnings reports not only showed a significant contribution from its other “visionary” initiatives like cloud computing but also from its Xbox gaming division.

The company just reported $37.2 billion in revenue, beating Wall Street expectations of $35.8 billion, with video games surging forward to help bring home the bacon.

Microsoft’s director of investor relations Kyle Vikstrom told CNN Business, “Gaming is one of the largest and fastest-growing forms of entertainment in the world. We expect there to be more than $200 billion of revenue in this industry in 2021…We’re seeing a really great early response to the console that’s going to launch next quarter.”

Aside from the Xbox, Microsoft also owns Minecraft and recently acquired Bethesda, maker of The Elder Scrolls and Fallout along with id Software’s DOOM series. Interestingly, Bill Gates wanted to acquire DOOM’s makers back in the early days of PC gaming because it, at one point, was more widespread than the Windows operating system itself. It looks like the company has finally fulfilled that wish.

Moving on to the next generation with Sony, Microsoft is putting forth two visions for the future of gaming, the “budget” Xbox Series S and the high-end Xbox Series X. There are also rumors that the company is putting out feelers to Japanese publishing houses in the hope of acquiring them and adding to the growing stable of developers and IP that Redmond is amassing. Perhaps noting that Sony’s strategy of high-quality, triple-A exclusives helped secure it the lead in the last generation, Microsoft’s strategy makes sense if the company sees gaming as a major contributor to the bottom line going forward.

What do you think of Microsoft’s next-gen plans? Are you planning on picking up one of the company’s systems? How do they stack up against Sony’s PS5? Let us know your thoughts in the comments section below if you like.

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Microsoft xCloud Out on Sept 15th

xCloud will be included with Game Pass and run on Android devices.

Microsoft had just announced more details surrounding their new xCloud gaming service. In addition to being able to play any game in their game pass library for a monthly fee, the cloud service will be free for Ultimate Game Pass holders. The ultimate game pass subscription costs just $15 per month.

Microsoft states that most titles in the library will be available on xCloud which includes popular games such as Gears of War, Halo, Grounded, Destiny 2, and upcoming games like Tell Me Why. Microsoft revealed a few weeks earlier that all their upcoming games will be immediately available on Game Pass.

xCloud will not be available for PC at launch and will only support Android phones and tablets. They have not yet addressed the situation of iPhones or iPads.

Microsoft also has some hardware displayed on their website that is designed to transform your phones into a full gaming experience by adding proper controls. This includes the Razer Kishi that mounts your phone and their mobile gaming clip that hooks your smartphone onto an Xbox controller.

Razer Kishi

Microsoft xCloud details can be found here

Halo 3 Drops on PC July 14th

Halo fans that have skipped out on the current gen Xbox and even the previous one will finally get the chance to play Halo 3 albeit on PC. Why has it taken so long for Microsoft to bring one of its most popular titles to computers? Apparently it is not as easy as it looks or one would think.

But Halo 3 isn’t the only thing up Microsoft’s sleeve on July 14th. The company has a slew of other announcements as well. As The Verge reports, this isn’t that surprising given Microsoft’s shopping spree of late to acquire game developers.

One game series that is expected to make a renewed appearance is the Fable series though that is purely gossip at this point. Microsoft has filed some legal paperwork around that IP but that doesn’t really mean much of anything.

Other titles include Hellblade II and Psychonauts II. Surprise titles could be another Perfect Dark game or a Banjo Kazooie title.

Of course, the majority of the anticipation is going to be for what comes for the next generation of consoles. With Sony already outlining its plans for the PS5’s next-gen games, Microsoft might be feeling the pressure to roll out its own titles.

It’s hard not to acknowledge that this year has been weird for the whole industry and well beyond. What would normally be revealed in massive public press outings is now instead relegated to the online space. It hasn’t seeped the hype away from many games but it has put a damper on some of the excitement. Not to mention the delays plaguing big-name titles from this generation (is anyone else expecting Cyberpunk 2077 to be delayed again? This author sure is).

Back to Halo 3, it’s interesting that Microsoft is revisiting that title and for PC no less. While many people might think the game’s day has come and gone, it has some staying power in terms of a compelling multiplayer experience and even a do-it-yourself mode when it comes to stage design. 

What do you think Microsoft will reveal on July 14th? Let us know your thoughts in the comments section below.

Also, don’t forget to check out our other video game articles by clicking here.