Wednesday, July 28, 2021
What you need to know
- Microsoft has announced its FY21 Q4 earnings, detailing an 11% increase in gaming revenue, with Xbox hardware revenue up 172% year-over-year (YoY) this quarter.
- Xbox content and services revenue slumped 4% compared to record numbers in 2020, amid the onset of the COVID-19 pandemic.
Microsoft exceeded expectations with its FY21 Q4 earnings on Tuesday, closing the financial year with $46.2 billion in company-wide revenue. The Xbox platform holder also saw an 11% increase in gaming revenue year-over-year (YoY) this past quarter, while software and services revenue slumped 4%, compared to record numbers in 2020.
The latest figures come as many key Xbox markets look to reopen following the COVID-19 pandemic. The overall revenue increase demonstrated continued growth for the Xbox business, although content and services failed to maintain momentum seen in its FY20 Q4 earnings.
Microsoft attributes the $128 million decrease in content and services revenue to a "decline in third-party titles" amid stay-at-home orders. However, its in-house first-party offerings and its Xbox Game Pass subscription services saw continued growth, offsetting the impact from third-party titles. The company reported "record numbers" for Xbox engagement last year, even scaling back some operations to account for unforeseen demand.
Microsoft has also seen continued three-figure growth for Xbox hardware revenue this quarter, increasing 172%, bolstered by the launch of Xbox Series X and Xbox Series S in November. The latest console generation continues to face supply constraints, with ongoing chip shortages failing to meet global demand. Console hardware shortages are expected to continue into the next financial year.
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