Microsoft’s gaming division just had its best Q3 ever, not only thanks to ongoing sales of Xbox Series S and X, but also in no small part due to them basically tacking an entire extra company onto their revenue for the quarter.
In its earnings today, Microsoft reported gaming revenue was up 50% year-over-year, jumping from $2.35 billion for the same period last year up to $3.53 billion this year. It’s not a record quarter overall, as Microsoft’s gaming revenues for October through December of last year spiked past $5 billion for the first time ever during that three-month period thanks to the new console launch. But it is a record for the January through March quarter, which is traditionally more of a quiet one for gaming companies following the busy holiday sales season of big new releases.
Obviously, the Xbox Series S and X still being novel new toys and improved supplies of both after the initial holiday rush was a major factor in the revenue spike. The shift from a quiet quarter in January to March 2020 to now brought the company’s hardware sales up a whopping 232% from this time last year to now. That’s admittedly unsurprising given that probably no one was buying Xbox Ones during the first three months of last year as they waited for the Xbox Series launch, but it’s still a rather impressive-sounding number.
But hardware was far from the only culprit in Microsoft’s excellent gaming quarter. Xbox content and services revenue — aka software, Game Pass, and basically everything that isn’t hardware — rose $739 million or 34%, which Microsoft attributes to… well, everything in that category, both first and third-party software and Game Pass revenue.
Baked into that content and services revenue though is a new factor this quarter: Bethesda and ZeniMax. Microsoft officially completed its acquisition of ZeniMax in March, meaning the company’s revenue is now lumped into everything else Xbox gaming. It’s unfortunately impossible to tell what impact this actually had on Microsoft’s revenue numbers, as ZeniMax was not a publicly-traded company before and did not disclose its actual quarterly or annual revenues prior to the acquisition, but it’s very likely that the rise in content revenue was at least somewhat helped by the company suddenly adding a bunch of extra game sales to its balance sheet. The full impact may end up being more evident in future quarters when major new games launch out of ZeniMax’s portfolio.
Rebekah Valentine is a news reporter for IGN. You can find her on Twitter @duckvalentine.