Microsoft on Wednesday announced its results for the second quarter of 2020, which also represents Covid-19’s first period of real impact on the West. The pandemic had some fairly obvious impacts during the company’s numbers between April and June, the most obvious of which was the Xbox’s strong growth.
In the ad, Microsoft reported a 64% growth in gaming-related revenue in the period compared to the same three months in 2019. In absolute numbers, that growth was $ 1.3 billion. Much of this leap is due to the content of the Xbox (games) and services connected to the console (Xbox Live, Game Pass and Game Pass Ultimate); Microsoft saw an increase of $ 1.2 billion in the sector, or 65%. The leap is attributed to “record engagement, including the strength of third party titles while the guidelines for staying at home continue”.
It wasn’t just in software that the pandemic raised the numbers on the Xbox. Microsoft also reports a significant increase in console sales, with hardware-related revenues skyrocketing 49% in the period. In several parts of the world there is a shortage of consoles, which should be exacerbated by the discontinuation of the Xbox One S All Digital and Xbox One X as the company prepares for the launch of the Series X at the end of the year.
The news supports a perceived trend with other entertainment services that benefit from users trapped at home, such as Netflix. The company gained in almost six months the same amount of new subscribers registered throughout 2019. Microsoft’s main competitor in games, Sony, also ordered an increase in PS5 production, probably noticing a strong demand for video games during the pandemic. .
What about the other businesses?
Microsoft is much more than just the Xbox, of course. The company had, as a whole, an excellent fiscal quarter, since a good part of its activities benefit from the dependence on technology to mediate work and teaching relations.
The Surface division, for example, increased by $ 374 million (28%) in the quarter compared to 2019, with more people and companies needing to renovate their computers to make teleworking possible. Likewise, the company saw an increase of $ 337 million (6%) with Windows, the result of more PC sales during the pandemic.
On Windows, the result brings some interesting results that exemplify the world situation. There was a 34% increase in revenue from the no-Pro version of Windows pre-installed on new computers, as a result of the demand for work and home study. On the other hand, the Pro version fell by 4%, as a result of weak demand from small and medium businesses.
Other sectors saw very strong growth. The division of products focused on servers and cloud services jumped 19%, driven mainly by an expressive growth of the Azure platform, which saw its revenues soar by 47%.
Office has also experienced significant growth, and much of it has come from end consumers. The company already has 42.7 million Microsoft 365 subscribers (ex-Office 365), an increase of 23% in the annual comparison. Among companies, the results point to an increase of 19% in revenues linked to Office 365.