Xbox Game Pass made Microsoft almost $5bn in annual revenue last year, proving the company is in a healthy state despite last month’s shock layoffs.
During the company’s latest earnings call, CEO Satya Nadella stated “Game Pass annual revenue was nearly $5bn for the first time” and Microsoft has 500 million active users across multiple gaming platforms and devices.
Indeed, Microsoft overall has seen an 18 percent increase in revenue (up to $76.4bn) and 23 percent increase in operating income (up to $34.3bn). As The Guardian has reported, the company’s stock rose by more than seven percent on Wednesday, as it remains the world’s second-most valuable company.
Said Nadella: “Cloud and AI is the driving force of business transformation across every industry and sector.
“We’re innovating across the tech stack to help customers adapt and grow in this new era, and this year, Azure surpassed $75bn in revenue, up 34 percent, driven by growth across all workloads.”
The news follows a statement from Nadella last week, where he claimed “Microsoft is thriving” and doubled down on the importance of AI.
“What does empowerment look like in the era of AI?” he said. “It’s not just about building tools for specific roles or tasks. It’s about building tools that empower everyone to create their own tools. That’s the shift we are driving – from a software factory to an intelligence engine empowering every person and organisation to build whatever they need to achieve.”
But this success comes at a human cost. Over 9000 employees were laid off from Microsoft earlier this month, including across its gaming divisions. The likes of Rare’s Everwild, The Initiative’s Perfect Dark reboot, and a new ZeniMax MMORPG were all cancelled, while roughly 200 staff from Candy Crush developer King were laid off and reportedly replaced by the AI tools they helped to build.
Microsoft told Eurogamer the layoffs were “necessary to position the company and teams for success in a dynamic marketplace”.
This Game Pass success is alongside Microsoft’s success as a third-party publisher on PlayStation. As we reported earlier today, the majority of PlayStation’s top-selling games in the US over the last quarter were published from Microsoft, including Forza Horizon 5, Doom: The Dark Ages, and The Elder Scrolls 4 Oblivion Remastered.