Microsoft’s video game-related revenue continues to expand as it shifts its focus to services like Game Pass. The company’s Xbox division brought in $2.251 billion in the quarter that ended March 31. That’s up 18 percent year-over-year compared to $1.906 billion in Q3 2017.
Instead of sharing how many consoles it sells, Microsoft instead focuses on its active Xbox Live users. That’s a metric it claims to care about much more since it is a service that people can access even outside of the Xbox hardware platform. In Q3 2018, Xbox Live had 59 million monthly active players. That’s up 13 percent from 52 million during the same period last year. It is also flat quarter-over-quarter compared to the busy holiday season.
“Xbox Live [had] continued growth across Xbox One, Windows 10, and mobile platforms,” reads Microsoft’s earnings press release. “Gaming revenue increased 18 percent driven by Xbox software and services revenue growth of 24 percent mainly from third party title strength.”
That “third-party title strength” is Fortnite. The game has caused a surge in spending on both consoles from players trying to get cosmetic items for their characters in the battle royale shooter. People re-upping their Xbox Live Gold memberships to stay active in Fortnite and the $10-per-month Netflix-style Game Pass are other contributors.
Microsoft did have a first-party release late in the quarter. Sea of Thieves, Rare’s online cooperative piracy simulator, launched March 20. That was the fastest-selling Rare game since at least 1995, and it had 1 million players in its first two days on the market.
Finally, Microsoft is investing in gaming, according to its financial numbers. The company’s operating expenses grew 5 percent during the last quarter, and it points to gaming (along with search and AI engineering) for driving those costs.