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Microsoft Highlights 20% Subscriber Growth For Xbox Game Pass As Part Of Renewed 'Ecosystem' Strategy

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Microsoft Highlights 20% Subscriber Growth For Xbox Game Pass As Part Of Renewed 'Ecosystem' Strategy

Microsoft Corporation (NASDAQ: MSFT) CEO Satya Nadella said Tuesday at the company’s Q2 earnings conference call that its Xbox Game Pass service now has more than 18 million subscribers.

What Happened: In September, the Game Pass service had 15 million subscribers. The latest figures represent a 20% jump in subscriptions.

Nadella said Xbox was gaining console market share as “gamers recognize the value of our broader ecosystem.”

The Xbox Live — the online service for Xbox One —  now has more than 100 million monthly active users, disclosed Nadella.

The Redmond, Washington-based tech giant surpassed $5 billion in gaming revenue for the first time this quarter, said Nadella.

“The launch of Xbox series X and series S was the most successful in our history with the most devices ever sold in a launch month,” the executive said in the earnings call.

Why It Matters: Microsoft revenue rose 17% year-over-year to $43.1 billion, beating Street estimates of $40.2 billion. Xbox business saw growth of 40% on a year-over-year basis.

Analysts said in November that even though rival Sony Corporation’s (NYSE: SNE) PlayStation 5 might outsell the new Xbox consoles, Redmond’s Netflix Inc (NASDAQ: NFLX) like $10 per month Game Pass service gives it an edge.

This month, Microsoft admitted it “messed up” the pricing of its Xbox Live Gold subscription service, which led to gamer outrage.

The company has since rolled back the prices and said it would let users access free-to-play games without the need for Gold membership.

Price Action: Microsoft shares rose 3.7% in the after-hours session to $240.92 on Tuesday after ending the regular session 1.22% higher at $232.33.

 

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