By JAMES SAWYER, Associated Press MicroSoft Corp. on Wednesday said its revenue will grow 6% in fiscal 2018 as it ramps up sales of its cloud-based cloud computing and entertainment software business.
The company, which also owns the video game maker Zynga Inc., said it plans to add an additional $1 billion to its cloud computing business in fiscal 2019.
The revenue growth would be a boon for Microsoft, which has struggled to maintain its foothold in the software business in the face of increasing competition from other software makers and competition from online video games such as EA’s World of Warcraft and Activision Blizzard Inc.’s Destiny.
Microsoft said it would sell its $3 billion gaming unit, the Star Wars game studio, to Chinese gaming giant Tencent Holdings Ltd.
Tencent is also a major shareholder in Zyngas games, including the popular multiplayer shooter game Call of Duty.
Shares of Microsoft fell 2.5% to $50.74 in early trading.
Shares closed higher after the company’s first quarter earnings report, which beat analysts’ expectations.
Microsoft reported quarterly revenue of $11.5 billion, down from $13.4 billion a year earlier.
MicroSoft said the sales of the Star Trek: The Next Generation film franchise and other new content would help it regain lost ground from rivals Microsoft Corp. and Sony Corp.
The growth in software and cloud computing revenue would be key to Microsofts future success.
The company has said it needs to generate more revenue from cloud computing, mobile games and entertainment to meet its quarterly financial targets.
Micros success hinges on a combination of strong software sales and the ability to generate revenue from the new Star Trek film franchise.