A bittersweet pill as PUBG loses out to free-to-play rival?

Microsoft Q3 gaming revenue was up by 18% as the company posted a strong set of Q3 results for the period ending 31st March. While exact figures for the Xbox business aren't split out, CEO Satya Nadella did reveal that Xbox software and services revenue grew by a huge 24% year-on-year – appearing to praise Fortnite without actually naming it.

He mentioned that Xbox growth was "mainly from third-party title strength." with a stronger lineup over Christmas and the burgeoning Fortnite undoubtedly playing a role: "Momentum in digital distribution as well as record levels of engagement driven by a third-party title contributed to better than expected software and services revenue."

With Microsoft itself publishing PlayerUnknown's Battlegrounds on the Xbox, that really only leaves one title with the heft to create those excellent figures. Maybe something of a bitter-sweet pill for the company, which worked hard to bring PUBG to Xbox all last year, only to see the buzz on console move immediately to its free-to-play competitor.

Still, as platform holder it's never a complete loss when you game is beaten by a competitor's title, as the figures show. 

Nadella summarised the gain to its continued efforts to "attract, retain, and deepen user relationships across Xbox Live, Game Pass and Mixer." To that end he stated that Xbox Live monthly active users grew to 59m, that's a rise of 13 per cent on last year – and is impressively flat to last quarter, which included the busy holiday period. Again it looks to be the Fortnite effect at work.

Sea of Thieves, the only big exclusive title from Microsoft in the period, was singled out for praise: "Our new first-party game, Sea of Thieves, drove game play across Windows 10 and Xbox One, in addition to nearly 10 million hours of viewing on services like Mixer in its very first week."

Nadella added that: "We had one of the best quarters in gaming, with strong revenue performance and record levels of engagement. We continue to pursue our expansive opportunity in gaming from the way games are created and distributed to how they are played and viewed." 

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