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Microsoft Reports on Q1 FY 2025: Xbox Division Sees Significant Growth
Last night, Microsoft published its report for Q1 of fiscal year 2025. While Microsoft’s reports may not be as informative as those from Activision Blizzard, which provide deeper insights into the gaming industry, there are still a few interesting highlights to note.
Key Highlights from the July – September 2024 Period:
- Revenue Growth: Microsoft reported a 43% increase in revenue for its Xbox division compared to the same period last year. Activision Blizzard accounted for the entire growth; without it, the revenue would have remained unchanged.
- Xbox Content and Services: The revenue from Xbox gaming services and content surged by 61% year-over-year, with Activision Blizzard contributing 53% to this increase.
- Decline in Hardware Sales: Sales revenue from physical Xbox devices dropped by 29%.
- Activision Blizzard’s Contribution: Activision Blizzard generated $1.69 billion during this quarter.
- Game Pass Records: The Game Pass service set records for both total revenue and average revenue per subscriber.
- Overall Revenue Growth: Microsoft’s total revenue increased by 16% to $65.6 billion, with net income rising by 11% to $24.7 billion.
Insights from Satya Nadella, CEO of Microsoft
In his remarks, Satya Nadella emphasized the company’s focus on building a business centered around long-term growth through higher-revenue content and services. He noted:
“A year after the acquisition of Activision Blizzard King, we are focused on creating a business that aims for long-term growth through more profitable content and services. You can already see this transformation in our results as we diversify the ways players access our content.”
Nadella further highlighted that this quarter saw record numbers of monthly active users, as more players engage with Microsoft games across various devices and on the Xbox platform. He mentioned that Game Pass also set new records for overall revenue and average revenue per subscriber.
Looking ahead, he remarked on the strength of their studios’ universes, citing the launch of Black Ops 6 as the largest Call of Duty release in history, achieving records for the number of players on launch day and the highest Game Pass subscriptions on that day. He also noted that game sales on PlayStation and Steam rose by over 60% compared to the previous year, reinforcing their strategy to meet players where they are and allow them to play more games across all the screens they use.
In conclusion, Nadella stated that Microsoft is rapidly innovating to enhance its capabilities in both commercial and consumer businesses. He also teased the upcoming Ignite conference, looking forward to sharing how they are helping all business functions leverage AI for growth in this new era.
