Call of Duty helps Xbox Game Pass post quarterly revenue

Microsoft has released its first quarter report for fiscal 2025, shedding light on the company's financial performance for the three-month period ending September 30, 2024. Overall Xbox hardware revenue fell 29% (continuing the downward trend), but game revenues overall increased 43%, thanks in large part to Activision Blizzard's major acquisition and the robust library the publisher brought to the table.

That 43% growth includes 43 points of net impact from the Activision deal, as outlined in Microsoft's earnings presentation. Xbox content and services revenue grew 61% (including 53 points of net impact from the acquisition). The Activision Blizzard merger is showing clearly a huge impact on the division, shouldering some of the slowdown from declining hardware revenue. It has shown impact in other ways too: Microsoft has done that laid off over 2,500 gaming workers AND more studios closed since the beginning of the year.

Microsoft CEO Satya Nadella noted that, a year after the big deal closed, “we are focused on building a business positioned for long-term growth, driven by higher-margin content and services.”

Gaming revenue grows on Xbox, despite declining hardware numbers

Nadella noted that Microsoft set “new records” for monthly active users in the quarter, and that Game Pass set a new first-quarter record for “total revenue and average revenue per subscriber.” Call of Duty Black Ops 6, which launched last week, has been called “the biggest Call of Duty release ever, setting a record for first-day players, as well as Game Pass subscriptions added on the day of launch”.

Despite the praise, Microsoft stopped short of sharing exactly what those record numbers were for all of the above.

Interestingly, Nadella added that unit sales of the game have also increased significantly on PlayStation and Steam: on the order of 60% year-over-year.

“This speaks to our strategy of meeting gamers where they are, allowing them to play more games on the screens they spend their time on,” Nadella said. This is consistent with that of Nadella recent observations on Xbox's multiplatform prospects.

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