Xbox Q4 revenue surges 64% driven by record engagement amid pandemic

Xbox One X
Xbox One X (Image credit: Daniel Rubino / Windows Central)

What you need to know

  • Microsoft has reported its FY20 Q4 financials, with gaming revenue up by 64 percent year-over-year ($1.3 billion).
  • The division benefited from increased Xbox content and services revenue, as demand pushes 65 percent growth.
  • Xbox hardware revenue also grew by 49 percent, with Xbox One consoles frequently sold out across the nation.

Microsoft has outlined its fourth-quarter earnings for its 2020 fiscal year, with company-wide revenue once again on the up, surpassing $38 billion. Gaming efforts were among standout successes, with current world events helping propel revenue up 64 percent year-over-year, or $1.3 billion.

COVID-19 pushed Xbox into the spotlight, as Redmond once again reports "record engagement" in an era of stay-at-home orders and social distancing. Xbox content and services grew 65 percent year-over-year ($1.2 billion), inclusive of games sales and subscriptions. Microsoft attributed that growth to increased overall platform demand, coupled to strong results from unnamed third-party properties.

Growth extends to Xbox hardware revenue, also climbing 49 percent this quarter. Xbox One X and Xbox One S bundles remain scarce nationwide, as consumers flock for at-home entertainment. It comes as Microsoft recently halted Xbox One X and Xbox One S All-Digital production, discontinuing existing models ahead of the next-generation Xbox Series X.

The results mark an impressive quarter for Microsoft's gaming division, once again strong throughout the pandemic. The closing weeks of last quarter underscored a sharp uptick in Xbox Live usage, with similar momentum reflected on Q4 earnings. The increased demand even saw Microsoft temporarily disable custom Xbox profile pictures, in order to ease strain on moderation services.

It favorably positions Microsoft to execute its next-generation vision, spearheaded by its Xbox Series X console, and Project xCloud cloud streaming technology. The current climate fosters a growing demand for interactive entertainment, with software sales and services like its Xbox Game Pass subscription fundamental to the brand moving forward.



Matt Brown

Matt Brown was formerly a Windows Central's Senior Editor, Xbox & PC, at Future. Following over seven years of professional consumer technology and gaming coverage, he’s focused on the world of Microsoft's gaming efforts. You can follow him on Twitter @mattjbrown.