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Microsoft Reports Impressive Q4 Earnings, Cloud and Gaming Sectors Strong

Microsoft finished Q4 2018 with over $30 billion USD in revenue, a 17% increase, in part due to cloud services and gaming growth, according to the company’s earnings release on Thursday.

Satya Nadella, CEO of Microsoft, noted the company’s surpassing of $110 billion in revenue for the year with “double digit topline and bottom line growth,” on a conference call. He also credited Microsoft’s commercial cloud business with “more than $23 billion in revenue for the year, with gross margin expanding to 57 percent.”

“The strength of our results reflects accelerating innovation and the trust customers are placing in us to power their digital transformation,” Nadella said.  “I shared our vision for the intelligent cloud and intelligent edge a little over a year ago – a vision that is now quickly becoming reality – and impacting every customer in every industry. Everything we have accomplished this year has been about accelerating our lead in this new era – and the tremendous opportunity ahead.”

The financial statement notes that intelligent cloud revenue was $9.6 billion for the quarter, an increase of 23%, driven by Azure growth of 89%.

Gaming was also a segment which experienced growth throughout the quarter.

“In gaming, we are pursuing our expansive opportunity – from the way games are created and distributed to how they are played and viewed, surpassing $10 billion in revenue this year for the first time,” Nadella said. “We are investing aggressively in content, community and cloud services across every endpoint to expand usage and deepen engagement with gamers. The combination of Xbox Live, Game Pass subscriptions and Mixer are driving record levels of growth and engagement.”

This statement is in line with what Phil Spencer, the executive president of gaming at Microsoft, stated at the company’s press conference during E3 2018, in which Spencer noted the company’s plans for a game-streaming service which could deliver “console quality gaming” regardless of the device used.

Mixer, Microsoft’s live streaming platform which Nadella referenced, was used at the E3 booth for 2018, in a push to expand the platform’s popularity.

Looking ahead, Microsoft plans to continue growth in the gaming sector by emphasizing user engagement, and noted that the growth rate in this sector will “moderate due to strong third-party titles launched a year ago.”

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