Microsoft revenue in gaming increases, company bullish on early Xbox series X/S reviews

Microsoft has reported its Q1 2021 earnings, noting a 22% increase in its gaming segment.

According to the financials, the 22% increase was driven by continued strong engagement and monetization across the platform.

Xbox content and services revenue increased 30%, to $3.1 billion, with strong growth in third-party transactions, GamePass subscribers, and first-party titles. The company also reiterated it has 15 million Xbox Game Pass subscribers.

For the second quarter of the current fiscal year, the company expects revenue growth in the high 20% range. Microsoft expects strong demand for Xbox Series X/S, driving supply-constrained hardware revenue growth of approximately 40%.

It's also expected that Xbox content and services revenue should grow in the low 20% range, with "strong engagement and continued momentum" in GamePass subscribers. The company's outlook does not include ZeniMax, which it still expects to close in the second half of the fiscal year.

The company also noted it is "delighted" by early reviews for Xbox Series X/S which it says will be the "most affordable and the most powerful" consoles available.

Overall, Microsoft reported a revenue increase of 12% year-over-year to $37.2 billion.