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Wednesday 21 August 2019

Microsoft continues cloud growth amid Xbox slowdown

Xbox hardware revenue declined by almost half, the company revealed in its latest quarterly results.

(Niall Carson/PA)
(Niall Carson/PA)

By Jamie Harris, PA Science Technology Reporter

Microsoft has put its latest financial results success down to deep partnerships, despite a slowdown in sales of the Xbox.

The firm reported total revenue of 33.7 billion dollars (£26.7 billion) for the last three months, up from 30.1 billion (£23.8 billion) during the same period in 2018.

It also revealed net income of 13.2 billion dollars (£10.4 billion) for the three months up until June 30.

Much of the growth came from its service offerings, particularly cloud computing which achieved revenue of 11 billion dollars (£9 billion) – an increase of 39% year-over-year – Microsoft said.

However, there were disappointing numbers for gaming, with revenue said to be down 10%, and Xbox software and services revenue dropping 3%.

Xbox hardware revenue declined by almost half (48%), which the firm said was primarily due to a decrease in volume of consoles sold.

Chief executive Satya Nadella said the company’s performance was thanks to its commitment to working with other firms in the digital space.

“It was a record fiscal year for Microsoft, a result of our deep partnerships with leading companies in every industry,” Mr Nadella explained.

“Every day we work alongside our customers to help them build their own digital capability – innovating with them, creating new businesses with them, and earning their trust.

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Microsoft chief executive Satya Nadella (Lauren Hurley/PA)

“This commitment to our customers’ success is resulting in larger, multi-year commercial cloud agreements and growing momentum across every layer of our technology stack.”

Elsewhere, Office Consumer products and cloud services revenue increased 6%, with Office 365 Consumer subscriber numbers rising to 34.8 million.

It also said revenue for professional social network LinkedIn, which Microsoft acquired in 2016, jumped by 25%.

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