Halo 5 and Minecraft Drive Microsoft's Video Game Revenue Up; Xbox Hardware Revenue Declines

Microsoft announced today its financial results for the second quarter of fiscal year 2016, ended on December 31st The company recorded a quarterly non-GAAP revenue over 25 billion dollars, operating income just south of 8 billion dollars, and net income just over 8 billion dollars.

Below you can peruse the full results:

  • Revenue was $23.8 billion GAAP, and $25.7 billion non-GAAP
  • Operating income was $6.0 billion GAAP, and $7.9 billion non-GAAP
  • Net income was $5.0 billion GAAP, and $6.3 billion non-GAAP

CEO Satya Nadella accompanied the press release with a statement:

“Businesses everywhere are using the Microsoft Cloud as their digital platform to drive their ambitious transformation agendas. Businesses are also piloting Windows 10, which will drive deployments beyond 200 million active devices.”

CFO Amy Hood also commented:

“We delivered double-digit operating income growth in non-GAAP constant currency while investing in key strategic areas that position Microsoft for continued long term growth.”

Moving to specific results for Microsoft’s gaming business (which is part of the “More Personal Computing” business), we also learn that  Xbox Live monthly active users have grown 30% year-over-year, reaching a record figure of 48 million. This, of course, includes non-paying users who don’t have an Xbox Live Gold subscription. Xbox Live transactions also grew.

While overall gaming revenue grew by 9%, and revenue from sales of video games grew by a whopping 57% (mostly thanks to sales of Halo 5: Guardians and Minecraft) Xbox hardware revenue declined, driven down by lower sales of Xbox 360 consoles, as you can see from the presentation slides below.

Besides the mention of a drop in Xbox 360 hardware sales, no precise shipment numbers or breakdown between Xbox One and Xbox 360 shipments were provided. The company announced a while ago that it would move to other metrics and cease providing those details during quarterly revenue reports, so this doesn’t come as a surprise.

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Giuseppe Nelva

Hailing from sunny (not as much as people think) Italy and long standing gamer since the age of Mattel Intellivision and Sinclair ZX Spectrum. Definitely a multi-platform gamer, he still holds the old dear PC nearest to his heart, while not disregarding any console on the market. RPGs (of any nationality) and MMORPGs are his daily bread, but he enjoys almost every other genre, prominently racing simulators, action and sandbox games. He is also one of the few surviving fans of the flight simulator genre on Earth.

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