Xbox Revenue Down Seven per Cent, but Game Pass Posts Record Sales
Microsoft's Xbox division saw revenue fall by almost seven per cent year-on-year in the last quarter. While hardware sales are down, Game Pass, Call of Duty and cloud gaming are strong.
Microsoft has released its financial report for Q2 FY25 (October to December 2024). The gaming division saw a decline of 7 per cent year-on-year to $6,581 million (€6,322 million). Xbox content and services revenue increased 2 per cent, while hardware revenue decreased 29 per cent. Content and services growth was driven by stronger-than-expected performance from Activision and Blizzard Entertainment content, including Call of Duty.
Microsoft has released its financial report for Q2 FY25 (October to December 2024). The gaming division saw a decline of 7 per cent year-on-year to $6,581 million (€6,322 million). Xbox content and services revenue increased 2 per cent, while hardware revenue decreased 29 per cent. Content and services growth was driven by stronger-than-expected performance from Activision and Blizzard Entertainment content, including Call of Duty.
Call of Duty: Black Ops 6 was the best-selling game on Xbox and PlayStation this quarter, according to Microsoft CEO Satya Nadella, and saw more players in its launch quarter than any other paid release in the franchise's history. Indiana Jones and the Great Circle, released in December, has been played by more than four million people. Game Pass set a new quarterly revenue record and grew its PC subscriber base by more than 30 per cent, "as we focus on driving fully-paid subscribers across endpoints," Nadella said. "We also continue to see strong momentum for Xbox Cloud Gaming, with a record 140 million hours streamed this quarter. (...) We are focused on improving the profitability of the business, in order to position it for long-term growth, driven by higher-margin content and platform services. And we are delivering on this plan," Satya Nadella said. No further details were provided on the impact of Activision Blizzard on the quarterly results.
Amy Hood offers the following outlook: "And in Gaming, we expect revenue growth to be in the low single digits. We expect Xbox content and services revenue growth to be in the low to mid-single digits driven by first-party content as well as Xbox Game Pass. Hardware revenue will decline year-over-year."
Microsoft as a whole generated revenues of $69,632 million (+12.3 per cent year on year). Nearly 9.5 per cent of the company's total revenue came from the gaming segment.
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Call of Duty: Black Ops 6 was the best-selling game on Xbox and PlayStation this quarter, according to Microsoft CEO Satya Nadella, and saw more players in its launch quarter than any other paid release in the franchise's history. Indiana Jones and the Great Circle, released in December, has been played by more than four million people. Game Pass set a new quarterly revenue record and grew its PC subscriber base by more than 30 per cent, "as we focus on driving fully-paid subscribers across endpoints," Nadella said. "We also continue to see strong momentum for Xbox Cloud Gaming, with a record 140 million hours streamed this quarter. (...) We are focused on improving the profitability of the business, in order to position it for long-term growth, driven by higher-margin content and platform services. And we are delivering on this plan," Satya Nadella said. No further details were provided on the impact of Activision Blizzard on the quarterly results.
Amy Hood offers the following outlook: "And in Gaming, we expect revenue growth to be in the low single digits. We expect Xbox content and services revenue growth to be in the low to mid-single digits driven by first-party content as well as Xbox Game Pass. Hardware revenue will decline year-over-year."
Microsoft as a whole generated revenues of $69,632 million (+12.3 per cent year on year). Nearly 9.5 per cent of the company's total revenue came from the gaming segment.
Never miss anything from the German, Swiss and Austrian games industry again: subscribe for free to our Daily newsletter and get all news straight to your inbox.
