Microsoft’s financial results are available for the third quarter of its 2022 fiscal year, and the company is once again posting double-digit growth: revenue of $ 49.4 billion and net income of $ 16.7 billion. of dollars. Revenues rose 18% and profit rose 8% year-on-year. Microsoft attributed some of this quarter’s growth to the cloud, with server and cloud services in particular revenue rising 29%, and Microsoft Cloud rising 32% to $ 23.4 billion.
In the future, digital technology will be the key element that will boost global economic output, “said Satya Nadella, Chairman and CEO of Microsoft. Across the technology stack, we are expanding our opportunities and engaging as we help customers get to know themselves, build stability and do more for less.
Continued customer commitment to our cloud platform and strong sales execution led to more than expected growth in commercial bookings of 28% and Microsoft Cloud revenue of $ 23.4 billion, up 32% annually, ” said Amy Hood, executive vice president and chief financial officer of Microsoft.
There are many reasons to suspect that Microsoft is still smiling this quarter. As the PC industry began to fall from its high pandemics, market barometers pointed to Chromebook sales (not Microsoft Windows machines), blaming them for the entire recent decline. .
Meanwhile, the Xbox has only had its best seller in 11 years, easily beating the relatively limited PS5 in terms of supply. Microsoft said its more personal computing business, including Windows and Xbox, grew 11% to $ 14.5 billion in the third quarter, and Windows OEM revenue growth, which is expected to include prices paid by manufacturers for put Windows 11 on the laptops and desktops you buy. , specifically increased by 11%. Businesses are strengthening [Windows 11] a faster pace than any previous release, ”CEO Satya Nadella said on the earnings call.
Xbox hardware revenue grew 14%, with a 4% increase in Xbox content and services revenue driven by growth in Xbox Game Pass subscriptions and first-party titles, for a total of 6% increase in gaming revenue $ 3.74 billion. Nadella also boasted of taking part in the gaming market on call to earnings, and said 10 million people have streamed games from Microsoft’s cloud which is one of the first hard numbers we have for popularity. of cloud gaming, because Google Stadia does not share them. Nvidia’s GeForce Now stats and statistics include everyone who has already used its free trial. PlayStation Now had 3.2 million subscribers last May, but Sony recently decided to include it in a broader subscription service.
Cloud gaming is a feature that is only available as part of the Xbox Game Pass Ultimate $ 14.99 per month tier, so statistics shared on Tuesday indicate that many people are trying it out.
Game Pass has proven popular, as Microsoft said in January that the service has already reached 25 million subscribers, up from 18 million last year. That said, it’s not clear how Microsoft defines what counts as an Xbox Cloud Gaming streaming game, so we’re not sure exactly what the stat might represent, how many current subscribers are included in that streaming game count , or how long the company game. it has to be counted as a flow. It’s also worth noting that you can technically sign up for a month’s Xbox Game Pass Ultimate for just a dollar and then cancel, and it’s not clear how many people made that and streamed a game. will also count in the figure shared by Microsoft on Tuesday.
Microsoft has invested heavily in Xbox Cloud Gaming, first launched on Android, then iOS and PC, then Xbox consoles, meaning you can now stream a large library of Xbox games over a wide range. of devices. And since October, the service has been fully powered by custom Xbox Series X hardware, which has improved frame rates and load times, enhancing the user experience.
Xbox Game Pass subscribers have also played 45% more over the past twelve months, Nadella said, reaching billions of hours throughout the year.
Microsoft also reported 17% revenue growth in Productivity and Business Processes this quarter, with Office up 12%. percent and 11 percent in the commercial and consumer divisions, respectively. Office 365 now has 58.4 million consumer subscribers, up 2 million from the previous quarter and 8 million from this period last year. Smart cloud revenue rose 26% to $ 19.1 billion.
And LinkedIn is still seeing spectacular growth, up 34% this quarter, after growing 37%, 42% and 46% respectively in the past three quarters.
Microsoft’s Surface device sales business also appears to be doing well, with a 13% increase in revenue after its revenue rose an impressive 8% last quarter (surprising since the company is warning about a decline) . ). 2022 is the 10that Microsoft Surface Anniversary.
Microsoft’s purchase of Activision Blizzard, which is expected to make Microsoft the third -largest game company by revenue, behind Tencent and Sony, did not reach those revenues – the deal is not expected to close until next and Year.
For the record, in September 2020, Microsoft announced that it was preparing to acquire ZeniMax Media, the core company of Bethesda SoftWorks, one of the largest private game developers and publishers in the world. With this statement, Microsoft is poised to take over many popular game franchises and more from many top associated studios including Arkane, iD Software, Tango Gameworks, Alpha Dog, and Bethesda Game Studios. The transaction value announced by Microsoft and confirmed by Bethesda is $ 7.5 billion.
Given Microsoft’s weight in video games, and Bethesda’s, regulators had to review whether this acquisition would not disregard the economic sector and lead to competition problems. On March 5, 2021, the European Commission validated this operation, a day after validation by the Securities and Exchange Commission (SEC), the federal body in the USA responsible for regulating and regulating financial markets. On its site, the SEC published an approval note regarding Microsoft’s acquisition of Bethesda. The note in question contains code S-4, which corresponds for the Commission to a decision relating to a acquisition or merger.
This approval gave Microsoft ownership of 23 video game creation studio teams, including Bethesda Softworks, Bethesda Game Studios, ZeniMax Online Studios, Roundhouse Studios, MachineGames, id Software, Tango Gameworks, Alpha Dog, and Arkane. Microsoft also announced that it plans to include future games from Bethesda in its monthly subscription service on Xbox called Game Pass when it launches on Xbox or PC.
Encouraged by this success, Microsoft announced its intention to acquire Activision Blizzard Inc., a game developer and publisher of interactive entertainment content. Microsoft is confident that this acquisition will accelerate the growth of its business in mobile, PC, console and cloud gaming and provide building blocks for the metaverse.
The deal is for $ 95.00 per share in an all-cash transaction worth $ 68.7 billion. The planned acquisition includes iconic franchises from Activision, Blizzard and King studios such as Warcraft, Diablo, Overwatch, Call of Duty and Candy Crush, in addition to global eSports businesses through Major League Gaming. The company has studios around the world with nearly 10,000 employees.
Bobby Kotick will continue to serve as CEO of Activision Blizzard, and he and his team will continue to focus on efforts to further strengthen the company culture and accelerate business growth. Once the deal closes, Activision Blizzard’s business will report to Phil Spencer, CEO of Microsoft Gaming.
“Gaming is the fastest growing and most exciting category of entertainment on any platform today and will play an important role in the development of metaverse platforms,” said Satya Nadella, President and CEO of Microsoft. We are investing deeply in world-class content, community, and cloud to start a new era of gaming that puts players and creators first and makes gaming safe, inclusive and accessible for everyone.
So far Microsoft has survived the kind of scrutiny facing Alphabet Inc and Meta Platforms, but the deal, which would make it the third largest video game company in the world, would put the Xbox maker on lawmakers ’radar. , said Andre Barlow of law firm Doyle, Barlow & Mazard LLC after the announcement of the transaction.
He previously reported that Microsoft would pay $ 3 billion in severance fees if the deal was fulfilled, according to a source familiar with the matter, suggesting that the company is confident in securing antitrust approval.
Microsoft and Activision have given each other until June 2023 to close the deal. The U.S. antitrust review of Microsoft’s proposed $ 68.7 billion acquisition of Activision Blizzard will be conducted by the FTC.
In the next quarter, Microsoft said it expects greater revenue growth even as it maintains single-digit growth in some of these businesses with an impact of approximately $ 110 million in revenue and little impact on operating costs. . of the war in Ukraine, and a note that The closure of Chinese production due to Covid could affect Windows, Surface and Xbox hardware. Gaming revenue is actually expected to decline, Microsoft Chief Financial Officer Amy Hood said, due to lower year-over-year engagement times as well as limited console supply.
Microsoft is preparing to make its video game streaming service available in web browsers, following restrictions imposed by Apple
The US antitrust review of Microsoft’s proposed $ 68.7 billion acquisition of Activision Blizzard will be conducted by the FTC, not the Department of Justice
Microsoft CEO Says Buying Activision Blizzard Will Help Him Build Metaverse According to Him Metaverse Is Important About Making Games