Today, Microsoft announced its financial results for the second quarter of the fiscal year 2020, , related to the period between October 1 and December 31.
First and foremost, we get an update on the performance of the More Personal Computing business, which includes Microsoft’s the gaming division and the Xbox brand.
You can see the relevant data below.
We learn that gaming revenue dropped by 21% year-on-year, while Xbox content and service revenue declined 11% year-on-year due to the unfavorable comparison with the prior year derved from the high sales of a third party title then (likely Red Dead Redemption 2, even if the documents don’t name it). This was partially offset by growth in subscriptions.
While a recent relevant change in the way Microsoft reports its metrics excludes absolute revenue for gaming and other specific business fields (on top of Xbox Live monthly active users) from the main documents, the form 10Q includes more details. We learn that the revenue for gaming was 3,327 million dollars, compared to 4,232 million earned during the same quarter last year.
We also learn that Xbox hardware revenue decreased 43% year-on-year, primarily due to a decrease in volume and price of consoles sold.
Do keep in mind that this is fairly normal at the end of a generation, as sales of consoles generally tend to drop when they’re about to become obsolete, while Holiday season discounts are deeper.
In terms of Microsoft as a whole, the key results are as follows, with the mention that commercial strength powered the second quarter results:
- Revenue was $36.9 billion and increased 14%
- Operating income was $13.9 billion and increased 35%
- Net income was $11.6 billion and increased 38% GAAP and 36% non-GAAP
- Diluted earnings per share was $1.51 and increased 40% GAAP and 37% non-GAAP
If you want to compare, you can check out the results from the previous quarter (from July to September) published by Microsoft in October.