Xbox gaming, Windows drive Microsoft's sales as the world works from home

As consumers worked on Windows PCs during the pandemic and played games on their Xbox in the evening, Microsoft benefited from both trends. In a shift from prior quarters, Microsoft’s More Personal Computing business, the home of Windows and Xbox, helped drive company growth.

In its earnings call Wednesday, Microsoft reported that net income fell by 15 percent to $11.2 billion. However, second-quarter revenue jumped 13 percent from a year ago, to $38 billion. This was helped in part by a 14-percent increase in revenue for the MPC group, to $12.9 billion.

There, the drivers were Microsoft’s traditional consumer pillars: Windows, Surface, and Xbox. The first six months of 2020 have been affected by the coronavirus in most areas of the world, and Microsoft has struggled to sell pricier Windows 10 Pro licenses. In the recent quarter, Pro license sales actually fell, down 4 percent. But as consumers and businesses turned to cheaper PCs, Windows 10 “non-Pro” (Windows 10 S and Windows 10 Home, mainly) grew 34 percent. Surface sales also recorded a strong quarter, jumping 28 percent to $1.72 billion.

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