Microsoft has published its latest earnings report for the quarter ending on March 31, 2021. Total revenue increased 19% to $41.7 billion. Operating income increased 31% at $17.0 billion. Specifically, Xbox content and services revenue increased by 34%. This was due, in large part, to income from Xbox hardware sales with the launch of Xbox Series X|S. However, another big reason for the increase is “driven by strength from third-party titles, Xbox Game Pass subscriptions, and first-party titles.
This year has seen a lot of big titles coming to Xbox Game Pass such as MLB: The Show 21, Octopath Traveler, and Outriders. Not to mention, the majority of games from Bethesda following Microsoft’s official acquisition of the company after it was announced last year. “With Game Pass, we are redefining how games are distributed, played, and viewed. Just last week, we added cloud gaming via the browser, expanding our reach across PC and mobile,” Microsoft said. “Content is the flywheel behind the service’s growth, and upon closing our acquisition of Zenimax Media this quarter, we made 20 of the world’s iconic and beloved games accessible via Game Pass, with more to come.”
Two notable first-party titles that Microsoft noted did very well were Minecraft and Microsoft Flight Simulator. “Minecraft had nearly 140 million monthly active users, up 30% year-over-year, making it one of the leading platforms in the creator economy,” Microsoft said. “Creators have generated over $350 million from more than one billion downloads of mods, add-ons, and other experiences in Minecraft. This is not including activity outside our own marketplace. We’re also seeing a vibrant marketplace emerge in Flight Simulator, with partners now able to sell content directly within the game.
Although things are going well, it looks like the struggle to get more Xbox Series X|S units in stores will continue into Summer. Microsoft Chief Financial Officer Amy Hood said “significant demand for the Xbox Series X and S will continue to be constrained by supply. And on the strong prior year comparable, we expect Xbox content and services revenue to decline in the mid to high single digits.”