Microsoft reports Q4 earnings, Xbox content and services down 4 percent

Gaming revenue, however, has seen an 11 percent growth.

Image via Microsoft

Microsoft held an investor meeting recently that detailed its results for the fourth quarter of the 2021 fiscal year (April 1 to June 30, 2021), which included overall revenue growth of 21 percent to $46.2 billion.

The main driver for this revenue growth wasn’t the computing division, however, like in the previous quarter. Instead, it was the Intelligent Cloud segment, which consists of server products and cloud services. That segment revenue was $17.4 billion (37.66 percent of total revenue) and increased by 30 percent compared to the previous quarter. Azure’s growth of 51 percent was one of the core reasons why the Intelligent Cloud segment increased so much. The public cloud computing platform provides stronger PaaS capabilities compared to its main competition, Amazon Web Services, and was a hit in the recent quarter.

Xbox-branded content and services decreased by $128 million (four percent) “driven by a decline in third-party titles on a strong prior year comparable that benefitted from stay-at-home scenarios, offset in part by growth in Xbox Game Pass subscriptions and first-party titles,” according to the segment results from Microsoft.

At the same time, gaming revenue increased to $357 million (11 percent) driven by growth in Xbox hardware, which was offset in part by a decline in Xbox content and services. Xbox hardware revenue increased 172 percent, driven by the “higher price and volume of consoles sold due to the Xbox Series X|S launches.” During the investor meeting, Microsoft also said Windows OEM revenue decreased three percent “with continued PC demand impacted by supply chain constraints, on a strong prior year comparable in OEM non-Pro.”

Microsoft’s stock price dropped from the closing price of $286.54 to $277.52 in the aftermarket following the release of its Q4 earnings report.

You can read the full breakdown of Microsoft’s Q4 earnings on the company’s official website.