Microsoft Corporation MSFT CEO Satya Nadella on Tuesday said that the company’s gaming platforms have crossed the 500 million monthly active users mark.
What Happened: During Microsoft’s fourth-quarter earnings call, Nadella said, “We now have over 500 million monthly active users across platforms and devices.”
He further noted that the company previewed a record 30 new titles this quarter, including the highly awaited Call of Duty: Black Ops 6 which will be available on Game Pass. “And our content pipeline has never been stronger.”
Microsoft CFO Amy Hood said that the gaming revenue of Microsoft witnessed a substantial rise of 44%, with a 48-point net impact from the Activision acquisition.
“Xbox content and services revenue increased 61%, slightly ahead of expectations, with 58 points of net impact from the Activision acquisition,” she added.
Nadella also touched upon the successful launch of Fallout as a TV show on Amazon Prime, which became the second most-watched title on the platform. This resulted in a nearly fivefold increase in hours played on Game Pass for the Fallout franchise quarter-over-quarter, he stated.
Microsoft anticipates gaming revenue growth in the mid-30s for the first quarter, propelled by the Activision acquisition. However, hardware revenue is projected to decline year-over-year, according to CFO Hood.
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Why It Matters: Microsoft reported fourth-quarter revenue of $64.7 billion, marking a 15% increase from the previous year. This figure exceeded the Street’s consensus estimate of $64.36 billion, according to data from Benzinga Pro.
During the call, Nadella was asked how investors should feel about the growth potential of the investment Microsoft is pouring into the gaming segment. In response, he said, their goal was to build a comprehensive portfolio that spans various gaming platforms, including Xbox, PC, and mobile.
He spoke about the significance of the Activision portfolio, noting that it provides valuable assets for both PC and console gaming, as well as mobile platforms, which Microsoft had previously lacked.
Price Action: At the time of writing, Microsoft shares were down 2.72% to $411.40 in after-hours trading. The company ended the regular session on Tuesday at $422.92, down 0.89%.
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