Micro .ft earnings beat expectations with the help of video game sales

On Tuesday, the company posted revenue of 2 2.8 billion for the three months ended September, better than Wall Street analysts’ forecast of 8 8.8 billion.
Income occurs Of micros .ft (MSFT) The intelligent cloud segment Az reached 13 13 billion, up 20% from the previous year’s period, including 48% annual growth in Azure’s revenue. Personal computing revenue rose 6% to .8 11.85 billion on the back of growth in sales of Xbox One and Micro .ft Surface devices.

Earnings for the quarter were 1. 1.82 per share, higher than the 1.55 per share analysts had forecast.

“The next decade of economic performance for every business will be defined by the pace of their digital transformation,” Nadella said in a call with analysts on Tuesday.

Analysts say the company’s cloud business growth is still in its infancy.

“The cloud shift and WFH are looking to stay dynamic here and the company is a big beneficiary of this trend,” Wedbush analyst Dan Ives said in a note to investors on Tuesday.

Despite strong earnings, investors may have some concerns about Azure’s growth rate. Shares of Micro .ft fell nearly 2% after hours of trading on Tuesday night. Azure’s 48% revenue growth during the quarter was down from 59% in the same period last year.

However some analysts argue that this slower growth would be expected given the large size of the business. Nadella said Tuesday he expects technical costs to double in the next 10 years.

Gaming also presents a great growth opportunity for microsoft .ft.

“Gaming is one of the largest and fastest growing forms of entertainment in the world. We expect the industry to generate more than 200 200 billion in revenue by 2021,” Kyle Wickrastrom, Microsoft’s director of investor relations, told CNN Business.

Micro .ft is set to release its next-generation video game console, Xbox Series X and more budget-friendly Xbox Series S next week. How the console sells could have an impact on the tech company’s personal computing bottom line in the next quarter. Both consoles will compete against Sony’s PlayStation 5 and the disc-less, less expensive version of that device.

“We’re seeing a really early response to the console going to launch in the next quarter,” Wickrastrom said.

During the last quarter, Microsoft announced that it had acquired video game publisher Bethesda’s parent company, Xenimax. The acquisition gives Microsoft ownership over popular video games, including the “Fallout” series, the “Elder Scrolls V: Skyrim” and the “Doom” franchise. It can help advance the microSD in games console wars.

Improvement: Kyle Wickristom, director of investor relations at Microsoft.com, said the company expects more than 200 200 billion in revenue from gaming in 2021. An earlier version of the story said it was expected in 2020.