Microsoft sees cloud business growth, but supply woes continue for Xbox

Microsoft Corp on Tuesday forecast a strong end to the calendar year thanks to its booming cloud business but said supply chain woes will continue to dog key units such as those producing its Surface laptops and Xbox gaming consoles.

The company beat Wall Street expectations for its first quarter ended Sept. 30, with pandemic-induced demand for the software giant's cloud-based services driving sales.

Contracts for cloud services provided by Microsoft, Amazon.com Inc's AWS and Alphabet Inc-owned Google Cloud have surged since last year when the COVID-19 pandemic shut offices and schools, pushing more activity online.

First-quarter revenue growth for Azure, the company's flagship cloud-computing business, came in at 48 percent in constant currency to beat analysts' estimates of 47.5 percent, according to consensus data from Visible Alpha. Amy Hood, executive vice president and chief financial officer of Microsoft, said that the company also expected "broad based growth" for the unit in the fiscal second quarter.

Azure's growth rate is the best direct measure of competition with rivals such as AWS and Google Cloud as Microsoft does not break out revenue from the cloud-computing unit.

Microsoft appeared to hold off Google Cloud's rising challenge. Google Cloud said on Tuesday its revenue surged by 45 percent to $4.99 billion, but failed to live up to estimates of $5.2 billion.

Revenue at the firm's other business units that house Windows software, the Teams messaging service and LinkedIn professional social networking platform also beat analyst expectations.

The supply chain issues affecting much of the global tech industry had mixed consequences for Microsoft.

Hood said Microsoft has continued to increase its cloud computing margins despite higher data center construction costs because it keeps adding more profitable services to those data centers. 

Hood also said that the company was able to ship more Xbox S and X gaming consoles than it expected in the first quarter - sales of gaming consoles and accessories were up 166 percent as the company continued to see strong demand for new models after the pandemic forced millions to seek entertainment at home.

But Microsoft and its rivals have been unable to keep up with demand because of the global chip crunch. Hood told Reuters the company expects Xbox demand to continue to exceed supply in the company's second quarter, which includes Christmas.

She also said that sales of the company's Surface computers, which declined 17 percent in the fiscal first quarter, were likely to keep sinking in the second quarter, with supply chain shortages hitting premium items in the lineup.

Microsoft's revenue from selling Windows to PC makers grew 10 percent year over year, beating the overall PC market, which only grew 3.9 percent over the same period because of supply constraints, according to data from IDC.

Hood said that the company was able to outperform in the PC market because of its strength in selling licenses for Windows destined for corporate customers, where it gets more revenue per license and has better market share.

Overall, revenue rose 22 percent to $45.32 billion in the first quarter ended Sept. 30, beating expectations of about $43.97 billion.

Net income rose to $20.51 billion, or $2.71 per share. The company said its results included a $3.3 billion net income tax benefit.

On an adjusted basis it earned $2.27 per share, trumping analyst expectations of $2.07 per share.

For the fiscal second quarter, Microsoft predicted a midpoint of $18.23 billion in revenue for its intelligent cloud business for the fiscal second quarter, above estimates of $17.84 billion, according to Refinitiv data.

First-quarter revenue from "Intelligent Cloud" surged 31% to $17 billion. Analysts had expected a figure of $16.58 billion, according to Refinitiv data.

Microsoft's forecast for its software app and Windows centric segments with midpoints of $15.83 billion and $16.55 billion, respectively, were also above Refinitiv estimates of $15.40 billion and $15.51 billion.

Shares of the company, which have risen nearly 40 percent this year, were marginally up in extended trading.

-reuters

Microsoft bolsters video game line-up as Xbox turns 20

SAN FRANCISCO, United States - Microsoft unveiled Sunday a batch of new titles for Xbox at the world's premier video game trade show, including award-winning sensation "Hades" and long-time hit "Halo".

The Xbox maker showed off 30 new games coming to its console, which in November will celebrate two decades on the market.

"Our team strives to make Xbox a place where you'll find the greatest games, the most dedicated developers, and the most passionate community," unit chief Phil Spencer said during a streamed event on the second day of a virtual Electronic Entertainment Expo (E3).

Microsoft revealed a coming take of beloved "Halo", along with new creations such as science-fiction action title "Starfield" and a vampire-battling adventure called "Redfall" from Bethesda Softworks.

Microsoft recently-acquired Bethesda Softworks, the maker of hits including "Fallout" and "Elder Scrolls."

As trailers depicted tense battles and the games' rich graphics, Microsoft stressed that all but a few would be available for play at its subscription Xbox Game Pass service.

The company also highlighted titles that will be exclusive to Xbox, which competes with rival consoles Sony PlayStation and Nintendo Switch.

Award-winning "Hades" from San Francisco-based Supergiant is coming to Xbox as well as PlayStation, the independent studio said Sunday.

"Hades" has so far only been available for play on personal computers and Switch.

"Hades", which snagged five honors this year at Britain's prestigious BAFTA Games Awards, is a "dungeon crawler" that challenges players to fight their way through the underworld.

The line-up of new titles comes as Microsoft works on software and a plug-in device to let people play Xbox video games on internet-linked televisions without need of consoles.

"As a company, Microsoft is all-in on gaming," chief executive Satya Nadella said in introducing the plan last week.

Microsoft has been playing on the strength of its Xbox unit as it vies with Luna and Stadia cloud gaming services run, respectively, by Amazon and Google.

In coming weeks, cloud gaming with Xbox Game Pass Ultimate subscriptions will be possible through internet browsers Chrome, Edge and Safari, according to Microsoft.

Many are expected to tune in on the closing day of E3 on Tuesday for a Nintendo streamed event at which it may reveal a new version of its coveted Switch consoles along with showing off new games.

Agence France-Presse

Microsoft unveils Xbox One with Spielberg, Activision tie-up

EDMOND, Washington — Microsoft Corp gave the world a first look at its new Xbox One on Tuesday, announcing that its first gaming console in eight years will come with exclusive video and software content, including a “Halo” series produced by Steven Spielberg.

The Xbox One, which will be available later this year at a price to be announced, will also be the first platform to release the next installment in Activision Blizzard Inc’s blockbuster shooter franchise, “Call of Duty”.

Microsoft hopes its third-generation console will attract video game fans who are increasingly sampling games on mobile devices, while also becoming a hub for living room entertainment.

The console took four years to develop and will launch worldwide “later this year,” games unit chief Don Mattrick told reporters at an event at the software company’s campus near Seattle, without providing details on timing or pricing.

The device’s launch came after months of intense speculation on industry blogs about what new features it might sport.

The new device interacts with a television, responds to voice and gesture commands, and includes Skype video calling, 15 exclusive game titles and original programming content.

The Xbox One will chiefly compete with Nintendo Co’s new Wii U and Sony Corp’s forthcoming PlayStation 4 for a bigger slice of the $65 billion-a-year computer game market.

Lion’s share

Console gaming still takes the lion’s share of a growing gaming market – about 42 percent of the $65 billion world market, according to Microsoft. But playing games on smartphones and tablets, or as an offshoot to online social networks, is gaining ground fast.

The world’s largest software company also sees the Xbox One as a broader strategic piece in the battle with Apple Inc, Google Inc and others to control consumer entertainment in the age of tablets and smartphones.

To that end, Microsoft presented the new box as more than just a video game console.

Acclaimed movie maker Steven Spielberg will be executive-producing a television series based on Microsoft’s blockbuster sci-fi game “Halo” for the Xbox One, the company said.

The new console will offer exclusive National Football League content and eight new game franchises, executives said.

Activision Blizzard Inc will launch “Call of Duty: Ghosts” later in 2013, first for the Xbox.

The device will have 8 gigabytes of memory, with an updated controller and new-generation Kinect sensor that communicates a user’s voice and gesture commands to the console. The technology is built on the Xbox operating system and the kernel of Windows software to handle Internet-based content.

Moreover, the device will let users store entertainment content, including movies, games and music, on cloud servers, the company said.

Despite its strong brand and ‘cool’ factor, the Xbox itself is not a key financial factor for the world’s largest software maker. Its Entertainment & Devices unit is set to break $10 billion in sales for the first time this year, but that’s half the sales of its Windows unit, and a lot less profitable, averaging less than 15 percent margin compared to 60 percent or higher for Windows or Office.

The company has more than 46 million members who subscribe to its online gaming and digital entertainment service Xbox Live, but that’s still a fraction of the people who pay for its software.

Microsoft’s stock was up slightly at $35.02 in afternoon trading on Nasdaq.

source: interaksyon.com

Black Ops 2: Gamers claim they got early copies

Gamers have told Newsbeat they've managed to get copies of Call of Duty: Black Ops 2 more than a week before its release.

The title is not due out until 13 November but on Friday three gamers showed Newsbeat copies of the game which they claimed were genuine.

They also said they knew a lot of people who already had it.

It's also been reported that it's become available to illegally download via torrent sites.

Gameplay videos have appeared on YouTube in recent weeks.

Cadz, 22, and Abdul, 25, said their physical copies of the game were genuine and claimed to have a receipt.


The pair said they got six copies from a friend and that "shops break release dates sometimes".

Newsbeat tried to contact Activision but they didn't want to comment on pirate copies or early releases.


Last month, Microsoft banned gamers caught with pirated versions of Halo 4 on the Xbox Live.

You've been commenting on this topic on Newsbeat's Facebook page. Here's a selection of your posts:

Ross Overton said: "Had Halo 4 about three weeks before it came out.

"These gaming companies should keep things more locked up then maybe people would not take advantage of getting it early and cheaper."

Sammy Tranter said: "I got a legit copy on Saturday from a PS3 retailer. Hooked on it already.

"Getting it early certainly does not mean getting it cheaper, as a few of you have speculated."

Joe Marshall said: "It's a joke, everyone should get it all on the same day, make the playing field even.

"I could have bought it early from a source but chose to wait as there was no point... I only play online too, which you can't do if you have it early."

source: bbc.co.uk

Xbox Kinect hacks set innovation in motion

London (CNN) -- Microsoft's popular Kinect for Xbox 360 has inspired countless ingenious "hacks" since its launch at the end of 2010.

The motion-sensing device has been modified to produce everything from real-time light sabers to nifty trash bins which catch your garbage (however bad your aim), proving a catalyst for creativity and invention.

Today, Kinect's reach extends far beyond its gaming origins, spurring advances in medical treatment.

Researchers at the UK's University of Southampton, for example, are using the technology to help patients recovering from a stroke.

A specially devised algorithm enables therapists to remotely track patients' hand and finger movements and guide them through exercises which compliment a wider program of physiotherapy.

"It widens our opportunities to make rehabilitation more accessible to people in their homes," says Cheryl Metcalf, lecturer in Biomechanics at Southampton.

"(Patients) can just plug it into their TV and be monitored over the internet," she said. "The whole tele-medicine idea opens up so many different avenues to be able to look and measure progress objectively."

Aided by electrical engineering company Roke Manor Research, Metcalf and colleagues have created a prototype which is currently being assessed against the traditional laboratory-based system.

It's an accessible technology which people are more willing to accept, says Metcalf, and Microsoft have been very supportive.

"We're very grateful to them for releasing the (Kinect for Windows) SDK (software development kit) and making it more accessible to people," she said.

The kit has been a hit with developers with downloads in the "hundreds of thousands" since its release 18 months ago, according to Microsoft.

The company itself has been busy looking at ways to exploit the technology through its network of research laboratories around the world.

At Microsoft Research's UK base in Cambridge, scientists are currently trialing a new imaging tool for surgeons.

"Touchless Interaction in Medical Imaging" gives surgeons the power to manipulate scans and medical images on a computer screen using hand gestures.

Doctors at Addenbrooke's Hospital in Cambridge and London's St Thomas' Hospital have been impressed with the equipment, says Helena Mentis, one of the Microsoft Research team working on the project.

"They've all been extremely excited to be able to have hands-on manipulation of imaging data that they are so reliant on, particularly with the push towards minimally invasive surgery," Mentis said.

Dr Tom Carrell, vascular surgeon at Guy's and St Thomas' NHS Foundation Trust, says Kinect has the potential to radically change surgery.

"With Kinect, we could revolutionize the way we do complex operations. Patients will spend less time in theater, and surgeons will be more in control of the information they need," Carrell said in a statement.

Kinect's influence could extend further says Mentis, manipulating 3-D models of the brain for neurosurgery and expanding touchless interaction into a whole suite of surgical tools.

Back in Southampton, the same optimism persists about the progress that can be made using Kinect for Windows.

Metcalf predicts that a commercially viable tool for stroke patients will be achieved within five years and that this flurry of activity is only the beginning.

"The other work that's going on around the world in different domains means we can all learn from each other as well," she said. "It just pushes the whole field forward."

source: CNN