Microsoft had previously worried that the Surface product line would not perform well in the quarter, but in fact, it did not happen. After the introduction of Surface Pro 8 and Surface Laptop Studio, Surface product line revenue increased by 8% in the quarter. Microsoft said the increase in revenue was mainly from the Surface Laptop. 2022 marks the tenth anniversary of the Surface product line, and Microsoft will be launching several products to celebrate.
The next-generation Xbox Series X/S game console has been on the market for more than a year, and its hardware revenue increased by 4%, overall game revenue also increased by 8%, and content and services revenue on the Xbox platform also increased by 10% year-on-year. Microsoft previously revealed that Xbox Game Pass subscribers have grown to 25 million, largely thanks to Halo Infinite and Forza Horizon 5. Microsoft says Halo Infinite has more than 20 million players, while Forza Horizon 5 has more than 18 million.
Additionally, Office performed well in the quarter, with commercial products and cloud services revenue up 14% year over year. Microsoft 365 Consumer Edition subscribers grew to 56.4 million, an increase of nearly 20% year on year, and Microsoft will continue to try to attract consumers to products such as Office subscription services and Microsoft Teams. Microsoft’s server products and cloud services revenue rose 29% year over year, largely due to higher revenue from Azure and other cloud services.
While Microsoft’s earnings report was good, its shares fell after the announcement amid concerns that revenue growth from Azure-related services was slower than expected.