Microsoft CFO aims to turn Xbox into a subscription business

During an investor call, Amy Hood was asked how investors should evaluate the long-term growth potential of the gaming business, especially after the recent investment in Activision Blizzard.

Hood replied that the real goal is to provide users with more content across more platforms.

“I think the real goal is to build something like a subscription business and software annuity.”

Hood identified this as the real goal, and the company is moving in that direction. According to recent reports, Microsoft’s gaming revenue grew by 44% year-over-year, while Xbox content and subscription services revenue increased by 67%.

At the same time, hardware revenue declined by 42%. This indicates where Microsoft’s priorities lie. Amy Hood clarified that Microsoft wants Xbox to focus on subscription services.

Thus, it can be expected that most of the focus will go to Game Pass, which means more games will be launched on the service. To reassure investors, Hood also noted that the company is encouraged by some of Game Pass’s successes.

Overall, Microsoft is pleased with how the subscription model is performing, which cannot be said for the hardware side.

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Cover author: Xbox. Cover source: Tech4gamers