Microsoft has reported record profits for the year ending June 30, 2021, driven by strong gaming sales and cloud computing services. The company’s net income was $16.5bn, up 47% from the previous year, while revenue increased from $38bn to $46.2bn, boosted by the launch of two new gaming consoles. Azure cloud services also grew by 51%, while Windows operating systems and hardware products saw increased sales. Microsoft plans to develop cloud computing services further, focusing on artificial intelligence and edge computing technologies. The company projects revenue could reach as high as $166bn for the current year.
Microsoft Reports Record Profits After Strong Gaming Sales
Microsoft Corporation, the world-renowned technology company, reported record profits for the year ending June 30, 2021. The company’s strong gaming sales and cloud computing services were the main drivers of the revenue increase, surpassing Wall Street expectations.
Revenue Increase
The company reported a net income of $16.5 billion, equating to earnings per share of $2.17, up 47% from the prior year. Its revenue increased from $38 billion last year to $46.2 billion, an increase of 22%. Gaming sales were responsible for a significant portion of the revenue increase.
Strong Gaming Sales
With the pandemic lockdowns, people were forced to stay indoors, leading to a significant increase in demand for gaming. Microsoft attributed its successful gaming sales to the launch of its two new gaming consoles, the Xbox Series X and S, released in November 2020. The company stated that its gaming revenue increased by a staggering 50% in the last quarter.
Cloud Computing Services
Microsoft’s Azure cloud computing services have also witnessed a steady growth of 51% on an annual basis, making it the second-largest cloud computing service provider after Amazon Web Services. The company has continued to invest in its cloud services division, as evidenced by the acquisition of Nuance Communications earlier this year.
Other Factors Contributing to the Revenue Increase
Besides gaming and cloud computing, Microsoft’s performance in other sectors also contributed to its revenue increase. Its Windows operating system and Surface hardware products also saw an increase in sales, up 44% and 23%, respectively. The company’s LinkedIn service also reported a 46% increase in revenue, mainly due to an increase in job postings.
Future Plans and Projections
Looking to the future, Microsoft aims to further develop its cloud computing services and focus on artificial intelligence (AI) and other edge computing technologies. The company has projected that its revenue for the current year could reach as high as $166 billion, indicating continued growth.
Conclusion
Microsoft’s record profits are a result of its strategic investments in various sectors, including gaming and cloud computing services. Despite the pandemic’s impact on the economy, Microsoft has managed to surpass expectations and report unprecedented growth, reflecting the company’s resilience and sound business practices.