A user named Daniel Ahmad on Twitter showed his earnings in the 2020 financial year in Microsoft in a post he shared. As you will appreciate this year, games and services have earned more for Microsoft than hardware. All the statistics we have are figures for Microsoft’s Xbox. Other Microsoft products are evaluated in separate categories.
This year was the year Microsoft earned the most in the chart drawn since 2008. Net revenue, which was $ 11.58 billion last year, rose 2% this year to $ 11.7 billion. Much of this gain consists of digital purchases from Xbox services and subscriptions. As every year, selling Xbox hardware takes up less space in the pie chart.
Services, games and in-game purchases, monthly subscriptions remain a driving force for Microsoft. Their focus on this area helped gain revenue despite falling hardware sales. The 11% gain in content and services increased the 31% drop in hardware sales.
As you can see in the pie chart, Microsoft’s 86% of the earnings from games in the 2020 fiscal year provide Xbox content and services, while only 14% are covered by hardware sales. In order to understand what has changed since last year, I immediately leave the pie chart of the past financial year below.
In the past fiscal year, Microsoft actually prepared these basics for Xbox. By moving the Xbox Game Pass to many different platforms, it expanded the scope of content and services and advanced its primary strategy in this direction. I estimate that they will give more weight to this area in the coming years. We have already stated that such moves were on the way with a news we made in the past months.
We have written before that Microsoft closed all its physical stores. We now better understand the reason for his desire to move to digital space. It wouldn’t be as logical to sell products to the market that they already dominate in their digital stores without paying for a physical environment. Besides, as of the year, Microsoft has balanced the sales of the hardware with the digital content and services. We do not know how much hardware sales will be affected by Xbox Series X in the coming year, but Xbox services and content will again cover a large piece of cake.