At the company’s quarterly earnings call late on Tuesday, Nadella said that subscriptions to PC Game Pass increased by 159 per cent over the previous year.
The company is transforming how games are distributed, played and seen through cloud gaming. The service has been used to stream games by more than 20 million users so far.
Additionally, the company is adding support for new gadgets like the Meta Quest, and handhelds by Logitech and Razor.
“We’re innovating across the entire tech stack to help every organisation, while also focusing intensely on our operational excellence and execution discipline,” Nadella said.
Additionally, revenue from gaming increased slightly by 4 per cent in constant currency above expectations because of better console sales.
Revenue from Xbox hardware increased by 13 per cent and 19 per cent in constant currency.
With reduced engagement hours and higher monetisation in third-party content, Xbox content and services income decreased 3 per cent and gained 1 per cent in constant currency. This reduction was largely offset by an increase in Xbox Game Pass subscriptions.
Due to a shift in the sales mix towards lower margin businesses, segment gross margin dollars fell by 9 per cent and 4 per cent in constant currency, and gross margin as a percentage dropped by nearly five points year over year.
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