Microsoft reports skyrocketing sales of Xbox, Windows and cloud services in the last quarter
Microsoft released financial results for the third quarter of fiscal 2021, reporting revenues of $ 41.7 billion and net income of $ 15.5 billion. Revenue was up 19%, and net income was up 44% year-on-year. Once again, Microsoft has seen strong growth in its Xbox and cloud services division.
The PC market is not slowing despite chip shortages, and Microsoft has once again capitalized on this. Windows OEM revenue grew 10%, reflecting strong consumer demand for PCs. These surprising numbers for Windows, in general, are driven by quarantine measures that have boosted demand for laptops and PCs over the past year. Commenting on its earnings, Microsoft said there are currently 1.3 billion active Windows 10 devices. Microsoft will detail the upcoming changes to Windows 10 and its planned radical visual OS update at next month’s Build conference.
The Surface division posted revenues of $ 1.5 billion in the third reporting quarter of 2021. This is significantly less than in the previous one ($ 2 billion). Still, the beginning of the calendar year is a traditional decline, and on an annualized basis, the growth amounted to a considerable 12%. Microsoft recently unveiled its new Surface 4 laptop and accessories; the quarter also launched the Surface Pro 7 Plus for businesses and schools. The Surface Pro is the most popular device in the family, and the latest model includes a larger battery, 11th Gen Intel processors, removable SSD, and LTE.
Microsoft is also home to Xbox devices and games. Once again, the gaming division’s revenues have grown. This is the second quarter of sales for Microsoft’s Xbox Series X and Series S consoles, and gaming device revenues are up 232% year over year on the consoles’ launch. Xbox software and services revenue also increased $ 739 million (34%) year-over-year. Gaming has become a key hobby for many in 2020, and this trend could continue throughout 2021. Microsoft did not release fresh numbers of Xbox Game Pass subscribers this quarter – it reported 18 million subscribers in the previous quarter.
Office commercial and cloud revenue also grew 14% in the quarter, while Office 365 Commercial grew 22%. Currently, there are nearly 300 million paying Office 365 subscribers. And the use of Microsoft Teams has also jumped to 145 million daily active users.
The office’s consumer offerings are doing well, too. Revenue from Office consumer products and cloud services grew 5%, driven primarily by Microsoft 365 revenue and a huge jump in subscribers, up 27% to 50.2 million.
Elsewhere, revenues from Microsoft server products and cloud services grew 26%, and the smart cloud business as a whole expanded 23% thanks to the growth of Azure.
Microsoft is breaking down its sprawling business into three main areas: Productivity and business processes; Intelligent cloud; Personal computers, and so on. The latter section includes Windows, Surface, Xbox, and Search – this sector contributed $ 13 billion (about 31%) to Microsoft’s total revenue basket of $ 41.7 billion this quarter. $ 15.1 billion – about 36%. Finally, Productivity and Business Processes contributed $ 13.6 billion, or nearly 33%.