Microsoft’s Q3 results came out today and we can possibly see a hint of the positive impact coronavirus has had on the industry. With the Xbox platform hitting record highs in some areas.
The results only ran up to the 31st of March, which only includes a small part of the current lockdown in many countries, but given that the industry is awaiting new consoles this year, the figures were still outstanding.
Microsoft CEO Satya Nadella said: “We saw all-time record engagement this quarter, with nearly 90 million active users of Xbox Live.” And in addition to that Xbox Game Pass has passed the 10m subscriber milestone. Now we don’t have any breakdown of how many of those subscribers were on very cheap deals, but it’s still an impressive number.
“We saw all-time record engagement this quarter, with nearly 90 million active users of Xbox Live.”
Nadella spoke on the pandemic briefly too: “People everywhere are turning to gaming to sustain human connection while practicing social distancing. And we continue to deliver new exclusive, first and third-party content to attract and retain gamers.” Adding later that “we are seeing increased monetization of in-game content and services.”
Project xCloud also continues to be a key part of Microsoft’s thinking for the future. With Nadella saying that the “gaming service now has hundreds of thousands of users in preview across seven countries, with eight more launching in the coming weeks.”
In terms of revenue while the overall revenue had declined by one per cent, with little change once currency fluctuations were taken into account. Xbox and services revenue was up two per cent year-on-year “with strong growth in GamePass subscribers and Minecraft.”
It’s all looking very rosy for Microsoft and Xbox then entering this critical year. The industry has worked very hard over this generation to try and move to service and digital revenues, in order better mitigate the usual rollercoaster incomes of big releases and console cycles, and as Microsoft releases these, its penultimate figures before the launch of Xbox Series X, it appears to have succeeded in doing just that.
Xbox chief Phil Spencer stated last year that he regarded Xbox Game Pass to be the saviour of the typical video game, in a market where the games-as-a-service model is becoming increasingly popular, Speaking at X019, Spencer stated that: “On Game Pass, a game can just be a game, with a beginning, a middle and an end. We can support those kind of games.”
In our interview with Matt Booty, head of Xbox Games Studios, we asked if Booty felt there should be more of such titles.
“I don’t think that there should, it’s a little bit like, should there be more sci fi movies, or should there be more spy novels? I don’t know. It’s based on what people want to watch and want to read. We don’t try to be directive on the content, but the great thing about Game Pass is that we don’t have to actually worry about that question,” he states intriguingly. “That’s because Game Pass becomes the service, Game Pass becomes the structure. And now, in our green light and concept review process, I don’t need to ask: ‘What’s your service plan, what’s your monetization plan, are you going to offer any DLC later, what is your monetization?’ We don’t have to ask any of that anymore, the teams can just go design the game that they want. And we can let Game Pass end up being the service.
“So to return to your question, should there be more standalone single player games that take about 20 hours to play? It seems like Outer Worlds is doing pretty good. Maybe there’s a lack of those titles right now, and that people like a game that’s about 20 hours with a beginning, a middle and an end.
“But I think on a higher level, it’s something we don’t have to worry about anymore, because whether it is a game like Bleeding Edge, which structurally starts to look more like a free-to-play game, more like a service-based game, that will do fine in Game Pass. And if we end up coming out with another game like Hellblade or Outer Worlds, which is a 12 hour or a 25 hour game that you play and enjoy, and then it kind of has an ending. That’s great in Game Pass too. So that’s really the power of Game Pass.”