Xbox Revenue in Q4 FY25 Exceeds Expectations
– 2 min read
Despite declining Xbox hardware revenue, Microsoft's gaming division exceeded expectations in the fourth quarter of FY25. For the first time, Game Pass annual revenue reached nearly $5 billion.
Microsoft has published its financial report for Q4 of 2025 and the 2025 financial year. Revenue from gaming in the fourth quarter (April to June 2025) rose by almost ten percent to $5.532 billion (€4.84 billion), surpassing expectations. This growth was primarily driven by revenue from the Xbox Content and Services division (+13%), thanks to increased sales of first-party content and Xbox Game Pass. Notable releases during this period included Doom: The Dark Ages, The Elder Scrolls IV: Oblivion Remastered and Forza Horizon 5 on PS5. According to Alinea Analytics, the latter sold over three million copies on PlayStation 5. However, Xbox hardware revenue declined by 22%.
Microsoft CEO Satya Nadella informed investors that the company had 500 million monthly active users across platforms and devices. Nadella: "And we are now the top publisher on both Xbox and PlayStation this quarter, with the successful launches of Forza Horizon 5 and Oblivion Remastered. The Call of Duty franchise has never been stronger: 50 million people have played Black Ops 6. Total hours surpassed 2 billion. Minecraft saw record monthly active usage and revenue this quarter, thanks in large part to the success of the Minecraft movie. (...) We surpassed over 500 million hours of game play streamed via the Cloud this year. And Game Pass annual revenue was nearly $5 billion for the first time." Currently, nearly 40 games are in development.
Amy Hood (CFO) is somewhat more conservative in her outlook: "And in Gaming, we expect revenue to decline in the mid to high single digits. Against a strong prior year comparable, we expect Xbox content and services revenue to decline in the mid single digits."
Gaming Revenue @ Microsoft (in million $)
2023
- Q1: 3.610
- Q2: 4.758
- Q3: 3.607
- Q4: 3.491
- FY: 15.466
2024
- Q1: 3.919
- Q2: 7.111
- Q3: 5.451
- Q4: 5.022
- FY: 21.503
2025
- Q1: 5.621
- Q2: 6.581
- Q3: 5.721
- Q4: 5.532
- FY: 23.455 (highest revenue for the division to date)
With revenue of $23.455 million, the gaming segment is Microsoft's third-strongest revenue driver in FY25, ahead of LinkedIn and Windows & Devices. Nevertheless, the company as a whole continues to generate the majority of its revenue ($281.724 million) from server products and cloud services ($98.435 million) and Microsoft 365 commercial products and cloud services ($87.767 million).
In addition, the studios behind the Age of Empires franchise revealed that they now have more than 65 million players across all platforms. Age of Mythology: Retold - Heaven's Spear is set to launch on 30 September. Another expansion for Age of Empires II: Definitive Edition is planned for later this year. Age of Empires IV will also receive an expansion, which is likely to be unveiled at gamescom. Age of Empires Mobile is being ported to PC and will be playable for the first time at gamescom.
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