Xbox Gaming Revenue up 51%, but Only Thanks to Activision Blizzard

Microsoft has released its FY24 Q3 financial report. Revenues in the gaming segment were up 51 per cent, mainly due to the impact of the Activision Blizzard acquisition. Xbox consoles, on the other hand, saw a considerable drop in sales.

Microsoft's total gaming revenue for the three months ended 31 March was 5.451 billion US dollars, roughly 5.07 billion Euros. This is a healthy increase of 51 per cent and puts gaming just under 500 million US dollars (466 million Euros) behind the Windows segment. Without the contribution from Activision Blizzard, the gaming business would have seen a decline of four per cent. The Verge writes about Activision Blizzard's integration costs: "The newly acquired division recorded $1.97 billion in revenue during Q3, but the cost of integration, transaction costs, and other costs of revenue all total $980 million. With other operating expenses ($1.34 billion), it calculates to an overall operating loss of $350 million for Activision Blizzard."

Xbox Content and Services revenue grew by 62 per cent; excluding Activision Blizzard, Microsoft would have seen a small increase of one per cent in this segment. However, the Xbox hardware unit continues to struggle, with revenues down 31 per cent as fewer Xbox consoles were sold. Overall, it is the second-largest revenue quarter for Xbox and the best Q3 ever. Reported revenues were ahead of guidance. Trailing 12-month Xbox revenues would exceed 20 billion dollars (18.6 billion Euros) for the first time.

No new figures were given for Game Pass subscribers; in February 2024, the company said it had 34 million, including Xbox Game Pass Core (previously Xbox Live Gold) members. According to CFO Amy Hood, the company expects Xbox hardware sales to decline again next quarter, but overall gaming sales to grow in the low to mid 40 per cent range, again driven by the impact of the Activision Blizzard acquisition.

Microsoft as a whole generated revenues of 61.86 billion dollars (57.6 billion Euros), an increase of 16 per cent. Net income was 21.94 billion US dollars (20.4 billion Euros), an increase of almost 20 per cent. Satya Nadella, chairman and CEO of Microsoft, points out: "Microsoft Copilot and Copilot stack are orchestrating a new era of AI transformation, driving better business outcomes across every role and industry." Amy Hood highlights the success of Microsoft Cloud, with revenues of 35.1 billion dollars (+23 per cent).

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.