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Microsoft’s gaming division helped contribute a significant boost to its revenue during its fiscal Q3 2021 earnings report today. Xbox hardware revenue jumped 232% year-over-year as consumers rush out to pick up Xbox Series X/S consoles. These new systems were, of course, not available until Microsoft’s Q2. But even in more direct comparisons, Microsoft is seeing noticeable gaming growth.

Xbox’s overall revenue increased 50% year-over-year. Software and services, meanwhile, were up 34% compared Q3 2020.

“Xbox content and services revenue grew 34% driven by strength from third-party titles, Xbox Game Pass subscriptions, and first-party titles,” reads Microsoft’s earnings report.

And while Microsoft wants to sell Xbox systems, the company is much more focused on the money it’s getting from services. Creating an ecosystem where people want to spend money on digital games is lucrative. While first-party releases are a big part of that, Microsoft also gets a cut of games and microtransactions it sells in its store. So the ongoing success of free-to-play console games like Rocket League, Fortnite, and Call of Duty: Warzone are all a part of Microsoft’s growth.


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Xbox Game Pass is central to this strategy, and the company highlighted that service as one of the standout reasons for its growth. Game Pass is at 23 million users, according to Windows Central. And I’ve heard similar numbers. And that growth should accelerate as Microsoft launches more games onto Game Pass, like Halo Infinite, later this year.

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