Microsoft posted the second quarter of its 2020 financial results, reporting revenue of $36.9 billion and net income of $11.6 billion. Surface and Office are both up, and revenue from Windows licenses has also increased just as Windows 7 support comes to an end. Gaming revenue is down a massive 21 percent, and Microsoft is blaming some of that on a strong quarter of a third-party game last year.
Microsoft’s Surface revenue jumped massively during the same quarter a year ago, on the back of a Surface Pro 6, Surface Laptop 2, Surface Studio 2, and Surface Headphones launch. It pushed Surface closer to a $2 billion business. This year, Surface revenue has also increased by 6 percent to $1.9 billion.
Microsoft launched its new Surface Pro X device with an ARM-based Qualcomm SQ1 processor inside, and also refreshed its typical Surface lineup. The Surface Pro 7 got the latest Intel processors and USB-C, while the Surface Laptop 3 got a new 15-inch model (with AMD processors), USB-C, and options for metal or fabric finishes.
Microsoft is planning to launch its new Surface Earbuds in the spring, and the company will likely unveil new Surface Book and Surface Go models this year, alongside its plans to launch the new dual-screen Surface Neo and Surface Duo devices.
Microsoft also has a big year ahead for its Xbox business. While we wait for the new Xbox Series X console to launch later this year, overall gaming revenue has decreased 21 percent for the recent quarter. Microsoft notes that Xbox content and services revenue also decreased by 11 percent.
Microsoft’s CFO Amy Hood also revealed gaming revenue will decline next quarter in the “low double digit range” due to console sales and “lower transaction volume on a third-party title.”
Overall, the company reported revenue growth of 14 percent for the second quarter, reaching $36.9 billion. Net income, meanwhile, jumped 38 percent ($11.6 billion).
