Judge approves $155M class action settlement related to Big Fish Games and online gambling lawsuit

Inside the Big Fish office in Seattle. (GeekWire File Photo / Nat Levy)

The past and current owner of Seattle-based Big Fish Games will pay $155 million to recover payments made by users of its social casino games after a judge on Monday granted preliminary approval of two class action settlements.

The legal dispute dates back to 2015 when Cheryl Kater sued Big Fish’s then-parent company Churchill Downs. The suit argued that Big Fish violated Washington state law governing online gambling because chips used in its “freemium” game Big Fish Casino represented “something of value.”

In 2016, a U.S. District Court judge in Seattle threw out Kater’s complaint. But two years later, a federal appeals court ruled that Big Fish Casino constituted illegal online gambling, according to Washington state law.

Kater is listed on the settlement as a plaintiff, along with Suzie Kelly and Manasa Thimmegowda.

Churchill Downs and Aristocrat Technologies are listed as defendants. Churchill Downs acquired Big Fish Games for $885 million in 2014, and sold it to Aristocrat in 2018 for nearly $1 billion.

Churchill will pay $124 million of the settlement, while Aristocrat will pay the remaining $31 million.

The settlement could have major implications for the casual games market as many popular games use in-app purchases as a revenue driver. Several other lawsuits were filed in the wake of the federal appeals court decision, challenging the legality of social games in Washington.

Washington lawmakers earlier this year debated legislation that would shield many of the state’s smartphone game companies from class-action gambling lawsuits. However, the bills did not advance beyond initial discussion.

As part of the settlement, Big Fish has agreed to “establish a voluntary self-exclusion policy that will allow players to exclude themselves from further gameplay, make available resources related to video game behavior disorders, and change the game mechanics of its apps so players who run out of virtual chips can continue on in the game they are playing without buying chips,” according to the settlement filed in the U.S. District Court for the Western District of Washington.

The payout amount will be based on how much each person lost while playing Big Fish Casino, Jackpot Magic Slots, and Epic Diamond Slots.

Big Fish Casino is a series of games like slots, blackjack, and roulette that use virtual chips. We’ve followed up with Big Fish about changes to its games as a result of this settlement, and will update this story if we hear back.

Founded in 2002, Big Fish has an additional office in Oakland, Calif. The company was previously led by former president Jeff Karp, who just joined Electronic Arts. It cut about 15% of its workforce in September 2018. Big Fish has more than 600 employees, according to LinkedIn.

(Hat tip to Venkat Balasubramani)

(Editor’s note: The headline was updated to reflect Big Fish Games’ involvement in the lawsuit)

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Seattle-based Big Fish Games lays off 250 people — read the memo sent to staff

Big Fish Games’ headquarters in Seattle. (Big Fish Games Photo)

Big Fish Games on Tuesday laid off approximately 250 people as part of a substantial restructuring at the 18-year-old gaming Seattle company.

Big Fish employs more than 600 employees according to LinkedIn, so the cuts impact nearly half its workforce. The layoffs hit all functional groups of the company, primarily affecting employees in Seattle. Big Fish operates another office in Oakland, Calif.

The cuts come just one day after a judge granted preliminary approval of two class action settlements that order the past and current owner of Big Fish to pay $155 million to recover losses incurred by users of its casino-gaming apps.

In a memo sent to staff today (read in full below), co-presidents Andrew Pedersen and Jason Willig wrote that the changes were made “to strengthen our business and position Big Fish for long-term success.” They also wrote that the cutbacks are coming from a “position of financial strength” and that saving money is not “the primary driver behind the changes.”

“The scale that Big Fish developed over many years as a multi-platform publisher has made it difficult to successfully lead in mobile, which requires greater agility and different operating and creative capabilities,” they wrote. “By pivoting how we operate and sharpening focus, we will gain increased flexibility to engage players more effectively today and invest more for the future.”

The job cuts are not related to the economic crisis or the company’s ongoing class action legal battle brought about by plaintiffs who accused Big Fish of violating Washington state laws governing online gambling.

Churchill Downs and Aristocrat Technologies are listed as defendants in the settlements. Churchill Downs acquired Big Fish Games for $885 million in 2014, and sold it to Aristocrat in 2018 for nearly $1 billion.

Churchill, operator of the famous Kentucky Derby racetrack, will pay $124 million of the settlement, while Aristocrat will pay the remaining $31 million.

Big Fish was previously led by former president Jeff Karp, who just joined Electronic Arts. Former CEO Paul Thelen — the former RealNetworks employee who founded Big Fish in 2002 — left following the Aristocrat acquisition.

The company cut about 15% of its workforce in September 2018 as it focused only on developing social casino and casual games.

For the 6-month period ending March 31, Aristocrat said its social casino segment was up 5% year-over-year to $332 million in bookings, but noted that the increase was partly offset by two Big Fish games: Big Fish Casino and Jackpot Magic Slots.

Bookings for Aristocrat’s social casual game segment fell 24% to $118 million during the same time period.

Video game usage has “skyrocketed during the pandemic,” Axios reported last month.

Some of Big Fish’s top mobile titles include EverMerge, Cooking Craze, Toy Story Drop, and Gummy Drop.

Big Fish has 14 open roles on its careers page.

Here’s the full memo to staff sent by Pedersen and Willig.

Big Fish Colleagues,

This morning, we shared news of important changes to strengthen our business and position Big Fish for long-term success. As a result, we are removing approximately 250 positions and announcing several organizational changes. While difficult to face today, these moves reinforce a commitment to players and our mission to become a truly great games company.

The scale that Big Fish developed over many years as a multi-platform publisher has made it difficult to successfully lead in mobile, which requires greater agility and different operating and creative capabilities. By pivoting how we operate and sharpening focus, we will gain increased flexibility to engage players more effectively today and invest more for the future. We are making these changes proactively from a position of financial strength. We will reduce certain costs, but saving money is not a primary driver behind the changes. Rather, our goal is to be a more effective and customer-centric organization.

These decisions are difficult and were made only after careful consideration. We are grateful for the contributions of every departing team member and are committed to treating those leaving the company thoughtfully and with respect. We are providing departing colleagues with a separation package that is above the minimum required to support them through this change.

Throughout today and this week, we will schedule meetings to discuss the changes in more detail and to give you an opportunity to ask questions and provide feedback. In the meantime, answers to some of the immediate questions you may have are set out below.

Which positions are you removing, and how will I know if I’m impacted?

These changes will primarily affect employees in Seattle, where we are making reductions in almost all functional groups. All impacted employees will be notified this morning.

What is changing and why?

We are removing approximately 250 positions and announcing several organizational changes that are designed to deliver three strategic benefits:

Creative Innovation: Under Andrew’s leadership, we are moving to a single studio model. We will expand partnerships with amazing developers like Neskin, Amber, HypGames, Proteus and others. This will support an ambitious product and growth strategy, while increasing flexibility to back new games that show promise.Live Operations & Publishing: We will build a new business performance organization to accelerate analytical capabilities and increase the impact of live services across our portfolio. In addition, we will consolidate studio, social, and performance marketing into a single growth team. Big Fish has amazing casual and social casino franchises that require more love and more effective support. Strengthening the catalog business under experienced, single-threaded owners will create a solid foundation to fuel growth. It will also offer opportunities to innovate and develop the next generation of leaders in our company.Efficiency & Scale: We will redirect more resources to efforts that directly benefit players and create business value increasing our focus and momentum. Developing a more flexible operating model is critical to support these efforts. This means an increasingly decentralized footprint, leveraging talent globally, expanding partnerships and leaning into the great company we are a part of within Digital, and the broader Aristocrat organization.

What does this mean for Big Fish Games and our culture?

As new leaders, we will strive to earn your trust as we protect and nurture all that’s great about Big Fish. Building on this, together we will create a more forward-looking, customer-centric, and diverse culture that fosters innovation and creativity.

What happens next?

This morning, departing colleagues will meet with People & Culture representatives, their team leads and a member of the senior leadership team.Additional meetings will be scheduled later in the day and throughout the week for colleagues whose roles are not impacted. These meetings will further explain the changes, set forth our growth strategy and provide opportunities for questions and feedback.

The focus for today is doing right by departing colleagues. Together with the Big Fish leadership team, our priority is ensuring these changes are communicated with utmost respect and empathy. Starting tomorrow, we are proud and humbled to begin writing a new chapter in Big Fish’s story together, building on a strong foundation with clarity of purpose and confidence in our future.

Andrew & Jason

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Microsoft makes case against Apple with filing in support of Fortnite maker Epic Games

Phil Spencer, head of Xbox at Microsoft, at a 2019 Xbox E3 Briefing at the Microsoft Theater in Los Angeles. (Microsoft Photo)

For the second time this month, Microsoft is speaking out publicly against Apple’s actions toward third-party developers, making a statement of support for Epic’s Unreal Engine in the game technology company’s lawsuit against the iPad and iPhone maker.

Microsoft filed a statement in federal court in California over the weekend, after Epic accused Apple of threatening to revoke its access to its Apple developer accounts and tools. It’s the latest twist in a larger dispute over the Fortnite maker’s use of an in-app currency system that sidestepped Apple’s traditional payment mechanism and the accompanying 30% fee.

Phil Spencer, head of Xbox, said on Twitter over the weekend that ensuring Epic has access to the latest Apple technology is “the right thing” for gamers and the industry.

Today we filed a statement in support of Epic’s request to keep access to the Apple SDK for its Unreal Engine. Ensuring that Epic has access to the latest Apple technology is the right thing for gamer developers & gamers https://t.co/72bLdDkvUx

— Phil Spencer (@XboxP3) August 23, 2020

Microsoft’s court filing explained the company’s position in detail.

“Denying Epic access to Apple’s SDK and other development tools will prevent Epic from supporting Unreal Engine on iOS and macOS, and will place Unreal Engine and those game creators that have built, are building, and may build games on it at a substantial disadvantage,” wrote Kevin Gammill, Microsoft’s general manager for Gaming Developer Experiences, in the company’s declaration.

He continued, “If Unreal Engine cannot support games for iOS or macOS, Microsoft would be required to choose between abandoning its  customers and potential customers on the iOS and macOS platforms or choosing a different game engine when preparing to develop new games.

“Because iOS is a large and growing market for games, Apple’s discontinuation of Unreal Engine’s ability to support iOS will be a material disadvantage for the Unreal Engine in future decisions by Microsoft and other game creators as to the choice of an  engine for new games.”

Microsoft previously spoke out against Apple’s App Store policies, saying it would not be able to bring its game subscription services to Apple devices because of the associated rules and restrictions.

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Madrid Games Week cancela su evento de 2020

Desde la organización de la Madrid Games Week se ha tomado la decisión de no celebrar su feria en la edición de 2020. La situación actual con la pandemia del coronavirus no permite realizar planes en el futuro, y muchísimo menos si implica grandes masas de personas en un entorno cerrado. Por ello, IFEMA y AEVI, la Asociación Española del Videojuego, han decidido tomar el 2020 como un año de descanso.

La Madrid Games Week de 2020 se iba a celebrar los días del 9 al 12 de octubre, pero el panorama actual en España con el virus ha impedido que esto sea posible. “Se trata de una decisión consensuada entre los organizadores con el objetivo de ofrecer un entorno de encuentro más favorable a empresas y visitantes, en una cita de grandes dimensiones”, comentan en un escrito que está disponible en su web oficial.

Sin embargo, desde la organización han querido destacar el papel del videojuego durante el confinamiento. Según los datos ofrecidos por AEVI, es un sector que en nuestro país cuenta con una facturación anual de 1.479 millones de euros.

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Epic Games Store: 20XX, Barony y Superbrothers: Sword & Sworcery EP, totalmente gratis por tiempo limitado

Steam, Origin, Uplay, GOG, juegos friv gratis…  En PC hay una enorme variedad de plataformas para comprar y descargar videojuegos (o jugar gratis). Epic Games Store no quiere ser uno más y por eso está apostando muy fuerte por convencer a los jugadores. Para ello todas las semanas anuncia una nueva tanda de juegos gratis. Pásate por aquí cada jueves y entérate de los últimos anuncios.  

Epic Games Store sigue con su buena racha de regalos. Tras ofrecernos la oportunidad de conseguir dos increíbles títulos sin ningún tipo de coste, ahora llega el momento de seguir incluyendo grandes novedades a nuestra biblioteca. En esta ocasión, con tres nuevos juegos que darán una nueva vida a nuestro PC y que llegan bajo el nombre de 20XX, Barony y Superbrothers: Sword & Sworcery EP.

Desde ya mismo puedes sumar estos tres increíbles juegos a tu biblioteca, con propuestas que nos llevan por la acción y exploración de mazmorras que disfrutar con amigos hasta completar una triste misión junto a una monje guerrera errante. De este modo tenemos ante nosotros tres interesantes propuestas que estarán disponibles hasta el próximo 6 de agosto.

Os dejamos con la lista completa de títulos disponibles hasta ahora como juegos gratis de Epic Games Store:

Wilmot’s Warehouse Del 6 al 13 de agosto (2020)

Superbrothers: Sword & Sworcery EP Del 30 de julio al 6 de agosto (Ya disponible)

Barony Del 30 de julio al 6 de agosto (Ya disponible)

20XX Del 30 de julio al 6 de agosto (Ya disponible) 

Tacoma Del 23 al 30 de julio (2020)

Next up Hero Del 23 al 30 de julio (2020)

Torchlight 2 Del 16 al 23 de julio (2020)

Killing Floor 2 Del 9 al 16 de julio (2020)

The Escapists 2 Del 9 al 16 de julio (2020)

Lifeless Planet Premier Edition Del 9 al 16 de julio (2020)

Hue del 2 al 9 de julio (2020)

Stranger Things 3: The Game Del 25 de junio al 2 de julio (2020)

Pathway Del 18 al 25 de junio (2020)

Samurai Shodown Neogeo Collection Del 11 al 18 de junio (2020)

ARK: Survival Evolved Del 11 al 18 de junio (2020)

Overcooked Del 4 al 11 de junio (2020)

Borderlands The Handsome Collection Del 28 de mayo al 4 de junio (2020)

Civilization 6 Del 21 al 28 de mayo (2020)

Grand Theft Auto V Del  14 al 21 de mayo (2020)

Death Coming Del 7 al 14 de mayo (2020)

Amnesia: The Dark Descent Del 30 de abril al 7 de mayo (2020)

Crashlands Del 30 de abril al 7 de mayo (2020)

For the King Del 16 al 23 de abril (2020)

Wheels of Aurelia Del 16 al 23 de abril (2020)

Just Cause 4 Del 16 al 23 de abril (2020)

Close to the Sun Del 9 al 16 de abril (2020)

Sherlock Holmes: Crimes and Punishments Del 9 al 16 de abril (2020)

Hob Del 2 al 9 de abril (2020)

Gone Home Del 2 al 9 de abril (2020)

Drawful 2 Del 1 al 9 de abril (2020)

Totally Reliable Service Del 1 al 9 de abril (2020)

World War Z Del 26 de marzo al 2 de abril (2020)

Tormento x Punisher Del 26 de marzo al 2 de abril (2020)

Figment Del 26 de marzo al 2 de abril (2020)

Watch Dogs Del 19 al 26 de marzo (2020)

The Stanley Parable Del 19 al 26 de marzo (2020)

Mutazione Del 12 al 19 de marzo (2020)

A Short Hike Del 12 al 19 de marzo (2020)

Anodyne 2: Return to Dust Del 12 al 19 de marzo (2020)

Offworld Trading Company Del 5 al 12 de marzo (2020)

GoNNER Del 5 al 12 de marzo (2020)

InnerSpace Del 27 de febrero al 5 de marzo (2020)

Assassin’s Creed Syndicate Del 20 al 27 de febrero (2020)

Faeria Del 20 al 27 de febrero (2020)

Aztez Del 13 al 20 de febrero (2020)

Kingdom Come Deliverance Del 13 al 20 de febrero (2020)

Ticket to Ride Del 6 al 13 de febrero (2020)

Carcassone Del 6 al 13 de febrero (2020)

Farming Simulator 19 Del 30 de enero al 6 de febrero (2020)

The Bridge Del 23 al 30 de enero (2020)

Horace Del 16 al 23 de enero (2020)

Sundered: Eldritch Edition Del 9 de enero al 16 de enero (2020)

Darksiders II: Deathinitive Edition  Del 1 de enero al 9 de enero (2020)

Darksiders: Warmastered Edition Del 1 de enero al 9 de enero (2020)

Steep Del 1 de enero al 9 de enero (2020)

Yooka-Laylee and the Impossible Lair Del 31 de diciembre al 1 de enero (12 Días de Juegos Gratis)

Hello Neighbor Del 30 al 31 de diciembre (12 Días de Juegos Gratis)

The Talos Principle Del 29 al 30 de diciembre (12 Días de Juegos Gratis)

Shadow Tactics Del 28 al 29 de diciembre (12 Días de Juegos Gratis)

Hyper Light Drifter Del 27 al 28 de diciembre (12 Días de Juegos Gratis)

FTL (Faster Than Light) Del 26 al 27 de diciembre (12 Días de Juegos Gratis)

Totally Accurate Battle Simulator Del 25 al 26 de diciembre (12 Días de Juegos Gratis)

Celeste Del 24 al 25 de diciembre (12 Días de Juegos Gratis)

Ape Out Del 23 al 24 de diciembre (12 Días de Juegos Gratis)

Little Inferno Del 22 al 23 de diciembre (12 Días de Juegos Gratis)

SUPERHOT Del 21 al 22 de diciembre (12 Días de Juegos Gratis)

TowerFall Ascension Del 20 al 21 de diciembre (12 Días de Juegos Gratis)

Into the Breach Del 19 al 20 de diciembre (12 Días de Juegos Gratis)

The Wolf Among Us Del 12 al 19 de diciembre (2019)

The Escapists Del 12 al 19 de diciembre (2019)

Jotun Valhalla Edition Del 6 al 12 de diciembre (2019)

Rayman Legends Del 29 de noviembre al 6 de diciembre (2019)

Bad North Del 21 al 28 de noviembre (2019)

The Messenger Del 14 a 21 de noviembre (2019)

Costume Quest Del 1 al 7 de noviembre (2019)

SOMA Del 1 al 7 de noviembre (2019)

Layers of Fear Del 25 al 31 de octubre (2019) 

QUBE 2 Del 25 al 31 de octubre (2019)

Observer Del 17 al 24 de octubre (2019)

Alan Wake’s American Nightmare Del 17 al 24 de octubre (2019)

Surviving Mars Del 10 al 16 de octubre (2019)

Minit Del 3 al 10 de octubre (2019)

Metro 2033 Redux Del 26 de septiembre al 3 de octubre (2019)

Everything Del 26 de septiembre al 3 de octubre (2019)

Batman Arkham Collection Del 19 hasta el 26 de septiembre (2019)

LEGO Batman Trilogy Del 19 hasta el 26 de septiembre (2019)

ABZU – Del 6 al 12 de septiembre (2019)

The End is Night – Del 6 al 12 de septiembre (2019)

Inside – Del 29 de agosto al 5 de septiembre (2019)

Celeste – Del 29 de agosto al 5 de septiembre (2019)

FEZ – Del 22 al 29 de agosto (2019)

Mutant Year Zero: Road to Eden – Del 15 al 22 de agosto (2019)

Ko-Op GNON – Del 8 al 15 de agosto (2019)

For Honor – Del 2 al 9 de agosto (2019)

Alan Wake – Del 2 al 9 de agosto (2019)

This War of Mine – Del 25 de julio al 2 de agosto (2019)

Moonlighter – Del 25 de julio al 2 de agosto (2019)

LIMBO – Del 18 al 25 de julio (2019)

Torchlight – Del 11 al 18 de julio (2019)

Overcooked – Del 4 al 11 de julio (2019)

Last Day of June – Del 27 de junio al 4 de julio (2019)

Revel Galaxy – Del 20 al 27 de junio (2019)

Enter the Gungeon – Del 13 al 20 de junio (2019)

Kingdon New Lands – Del 6 al 23 de junio (2019)

City of Brass – Del 30 de mayo al 6 de junio (2019)

Rime – Del 23 al 30 de mayo (2019)

Stories Untold – Del 16 al 30 de mayo (2019)

World of Goo – Del 2 al 16 de mayo (2019)

Transistor – Del 18 de abril al 2 de mayo (2019)

The Witness – Del 4 al 18 de abril (2019)

Oxenfree – Del 21 de marzo al 4 de abril (2019)

Slime Rancher – Del 7 al 21 de marzo

Thimbleweed Park – Del 21 de febrero al 7 de marzo (2019)

Axiom Verge – Del 7 al 21 de febrero (2019)

What Remains of Edith Finch – Del 11 al 24 de enero (2019)

Super Meat Boy – Del 28 de diciembre de 2018 al 10 de enero (2019)

Subnautica – Del 12 al 27 de diciembre (2018)

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NBA will use new Microsoft Teams ‘Together’ feature for virtual fan experience during games

More than 300 fans will be shown on 17-foot video screens during NBA games this season, interacting with each other via Microsoft Teams. (NBA Photos)

The NBA is getting help from Microsoft to improve the fan experience as the league embarks on an unprecedented shortened season amid the pandemic.

The two organizations, which announced a multiyear cloud partnership in April, will debut virtual viewing technology powered by Microsoft’s Teams collaboration software when the season begins July 30 near Orlando, Fla.

The NBA is installing 17-foot video boards surrounding the courts where games will be held with no fans due to COVID-19. More than 300 fans for each game will appear on the boards and interact with each other using the new Microsoft Teams “Together” mode, a feature for video meetings that places participants against a shared virtual background, removing individual backdrops in an effort to make it easier to pick up on non-verbal cues and to interact more like in real life.

The tech “gives participating fans the feeling of sitting next to one another at a live game without leaving the comfort and safety of their homes, while players experience their energy and support in-venue,” according to a press release.

FOX is doing something similar for Major League Baseball broadcasts, given that no fans are allowed at baseball games, either — though it is using avatars instead of real people.

Microsoft has seen a big spike in Teams usage due to the work-from-home mandates during the health crisis. The new deal with the NBA shows how the software can be used beyond the office.

Microsoft in June made Teams available for personal use with friends and family.

Teams now has more than 75 million daily active users. Microsoft is battling Slack, Zoom, and other collaboration software makers.

Microsoft’s deal with the NBA includes the creation of a new direct-to-consumer platform that runs on the company’s cloud computing technology. Microsoft will also become the “Official Artificial Intelligence Partner” and an “Official Cloud and Laptop Partner” for the NBA, WNBA, NBA G League, and USA Basketball beginning with the 2020-21 NBA season.

The deal is another key sports-related partnership for Microsoft, which has worked closely with the NFL since 2013. Microsoft extended its NFL deal earlier this year. NFL players and coaches will continue using Microsoft Surface tablets on the sidelines during games; teams and NFL staff will also use Teams. The Surface tablet was featured in Microsoft’s Super Bowl ad this past January.

The NBA halted play on March 11 due to the global pandemic. The league invited 22 teams to its “bubble” at the Walt Disney World Resort, where players are following strict safety guidelines both on and off the court to prevent the spread of COVID-19. Many say it’s “the most ambitious undertaking in league history,” The New York Times reported.

The NBA also announced Friday that it will use more than 30 cameras, including robotic devices, that are repositioned closer to the court where fans normally sit. It is also using microphones around the court to pick up sneaker squeaks and ball bounces, and using in-arena DJs and announcers to help simulate a traditional game experience.

The league is also partnering with Twitter, TikTok, and Snapchat on various tech-enabled fan experiences such as virtual cheering and augmented reality viewing.

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Microsoft revenue up 13% to $38B as stay-at-home orders boost cloud and games businesses

Microsoft CEO Satya Nadella, at a past shareholder meeting. (GeekWire Photo / Todd Bishop)

Microsoft posted revenue of $38 billion, up 13%, beating Wall Street’s expectations for its fiscal fourth quarter ended June 30.

The COVID-19 pandemic and related stay-at-home orders boosted the company’s productivity, cloud and gaming businesses, including subscription versions of Microsoft Office, and the Microsoft Azure cloud platform. Revenue from Xbox content and services was up 64% for the quarter.

However, traditional Office software licensing continued to suffer, and the company said LinkedIn and search advertising were impacted negatively due to the slowdown in jobs and the economy.

The company’s profits fell 15% to $11.2 billion, reflecting a $450 million charge from closing Microsoft Stores and an unusual $2.6 billion tax benefit in the prior year.

Excluding extraordinary events and charges, profits would have been up 5% for the quarter, the company said. Its earnings per share of $1.46 beat expectations of $1.37/share.

Microsoft shares are down more than 2% in after-hours trading. Revenue growth in Azure was 47%, a smaller percentage increase than in recent quarters.

The company said its annual commercial cloud revenue exceeded $50 billion for the first time, up 31% from the prior year. Commercial cloud includes Office 365 Commercial, Microsoft Azure, and commercial portions of LinkedIn, Dynamics 365 and other Microsoft cloud businesses.

Microsoft’s earnings conference call starts at 2:30 p.m. Pacific time. Analysts are likely to press Microsoft CEO Satya Nadella about the antitrust complaint that Slack filed against the Redmond company in Europe this morning over Microsoft’s bundling of its Teams collaboration software with its Office 365 subscriptions.

Here are the trends in the company’s three primary divisions:

Productivity and Business Processes: Revenue rose 6% to $11.75 billion. Operating income fell 9% to $3.97 billion.

Office 365 Commercial revenue was up 19%, reflecting growth in software and services subscriptions for businesses. However, traditional Office Commercial licensing revenue declined 34%, reflecting the difficult economy and the ongoing shift to cloud-based subscriptions.

Office Consumer revenue rose 6%, also due to subscription growth, and the number of total Office 365 subscribers rose 23% to 42.7 million.

Intelligent Cloud: Revenue rose 17% to $13.37 billion. Operating income rose 19% to $5.34 billion.

Server products and cloud services revenue rose by $1.9 billion to 19%, due largely to the 47% increase in Azure revenue.

Azure growth was “primarily driven by growth in our consumption-based services,” the company said in its earnings release. “Server products revenue was relatively unchanged, with growth in hybrid and premium solutions, offset by a slowdown in transactional licensing.”

More Personal Computing: Revenue rose 14% to $12.9 billion. Operating income rose 15% to $4.1 billion.

Windows revenue was up 6% overall, due in part to “consumer demand from remote work and learn scenarios, including the benefit in April from unfulfilled third quarter demand,” the company said.

Gaming revenue rose 64%, or $1.3 billion. The company said the increased in Xbox content and services revenue was “primarily due to record engagement, including strength from third-party titles, as stay-at-home guidelines continued. Xbox hardware revenue increased 49%, primarily due to an increase in volume of consoles sold.”

Join the conversation along with Intel, Google Cloud, and key technology partner Appsbroker as they share game-changing results from customers, like RiverMeadow and ClimaCell, who have deployed on Google Cloud instances and VMWare bare metal.

The session, presented by Intel and Google Cloud, will take place Thursday, July 30th at 8:00 a.m. (PST).

Register today

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