COVID-19 spikes Xbox's Q4 revenues by $1.3 billion

Thanks to COVID-19 lockdowns helping spark game sales, Microsoft is closing the Xbox One console generation with a bang.

Today Microsoft reported its Q4'20 earnings, revealing tremendous revenue spikes in gaming software, services, and hardware. The entire Xbox gaming division's earnings rose 64% YoY by $1.3 billion. Services and software, which includes subscriptions like Xbox LIVE Gold, Game Pass, game sales and monetization, skyrocketed by 65% YoY, representing a $1.2 billion increase. Hardware likewise jumped by 49% year-over-year.

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As Microsoft doesn't provide specifics on its gaming branch any more, these numbers lack context. However, Twitter data sleuths like DomsPlaying note this puts Xbox's total yearly revenues at around $11 billion, which is higher than the $10 billion it typically earns every year. For reference, Xbox gaming would've earned roughly 7% of Microsoft's total colossal $145 billion in yearly revenues.

"And in Gaming, revenue increased 64 percent and 66 percent in constant currency, significantly ahead of expectations, with the continued benefit from play-at-home scenarios driving record levels of engagement and monetization across the platform, as well as a significant increase in console sales. Xbox content and services revenue increased 65 percent and 68 percent in constant currency, with strong growth in third party transactions, GamePass subscribers, and Minecraft,"Microsoft CFO Amy Hood said in the earnings call.

One key data point remains perfectly clear: COVID-19 is helping boost hardware and software sales across the board. The NPD Group noted strong games revenues throughout the U.S. since COVID-19 lockdowns started, and companies are reporting rising earnings on strong demand for hardware products.