Xbox Revenue Jumps 43% Year-on-Year, Hardware Revenue Falls 29% - Sales
by William D'Angelo , posted on 01 November 2024 / 5,067 Views
Microsoft has released its earnings report for the first quarter of the 2025 fiscal year, which ended up September 30, 2024.
Xbox gaming revenue increased by 43 percent year-on-year to $5.62 billion. This includes "43 points of net impact from the Activision acquisition." This is a better performance than the forecast, which was to see growth in the mid 30s percent.
Xbox content & services revenue increased 61 percent compared to the same quarter a year ago. This includes "53 points of net impact from the Activision acquisition." This is inline with the forecast, which was to see growth in the low to mid 50s percent.
Xbox hardware revenue fell 29 percent compared to a year ago. This is inline with expectations, which was to see a decline year-on-year.
Overall, Microsoft reported for the quarter revenue was up 16 percent year-over-year to $65.6 billion and net income was up 11 percent to $24.7 billion.
"One year since we closed our acquisition of Activision Blizzard King, we are focused on building a business position for long term growth driven by higher margin content and services," said Microsoft CEO Satya Nadella. "You already see this transformation in our results as we diversify the ways that gamers access our content.
"We set new records for monthly active users in quarter as more players than ever play our games across devices and on the Xbox platform.
"Game Pass also set a new Q1 record for total revenue and average revenue per subscriber. And as we look ahead our IP across our studios has never been stronger.
"Last week's launch of Black Ops 6 was the biggest Call of Duty release ever. Setting a record for day one players, as well as Game Pass subscriber adds on launch day. And unit sales on PlayStation and Steam were also up over 60 percent year-over-year."
Microsoft's forecast for the quarter ending December 31, 2024 expects total Xbox revenue to decline in the high single digits percent year-on-year due to a decline in hardware. Xbox content & services is expected to be relatively flat.
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.
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I assumed we would now finally get the first real comparable report. Only to learn again Microsoft has a different schedule of their fiscal year.
Oops!
Well, then finally it's done now.
All past 4 quarter reports with the addition of ABK numbers are through now.
"gaming revenue grew 43% year-on-year, including 43 points of net impact from the Activision acquisition. This means that without the acquisition, Gaming revenue would be essentially flat."
This is the main part.
Let's see their next quarter reports and how Xbox holds up with ABK compared to their first 4 reports with them.
And this is why from a financial perspective, Xbox Series now tracking below the units sold of Xbox One isn't a big deal.
Xbox still makes a killing on Game Pass on console and PC, as well as controllers and other things.
Xbox 5 can sell lifetime totals around the original Xbox and as long as the services, games, and accessories sell on everything Xbox it's not a big deal.
the reason why Xbox gaming revenue (note: not profit) is up YoY has to do with Blizzard, not GamePass. Subscription numbers haven't changed much this past year, from what I’ve heard. Not to say GP isn't making Microsoft a ton of money, it’s just not responsible for the YoY jumps seen here.
yall whats with the downvotes? Is what I’m saying here not true? Xbox gaming is making more money b/c their source of revenue has expanded significantly with the Activision Blizzard merger, which wasnt present this time last year.
edit: Seems I’m now in green…was down to “-3” for some reason??
Cause it's not true as CEO said that gamepass has grown cause of cod. It has made profit for them. Don't be cynical . Gamepass is involved in those figures. Not this one but the one before that Ms said that gamepass contributed 15 percent towards those profit.
( ? ) In my initial comment, I stated that I don’t believe GP has grown all too much over the past 12m. Never asserted that it hadn’t grown, seems you’d be the only one with this interpretation. Additionally, I stated that this article does not provide evidence of the profitability of GP (which I explicitly clarified in my original comment that GP does generate a good amount of money).
In short: chill out lol.
I think the problem will be later down the road. Right now Xbox has Xbox one and Xbox series users. Xbox series console sales are falling behind Xbox one. Now if Xbox one users start migrating to PS5 once they upgrade Xbox will slowly start losing more and more money. Xbox one users will eventually upgrade and if MS can't keep them in their ecosystem they are going to lose a lot of money.
And when you have stopped selling consoles altogether they can't bring your financials down anymore. taps head
On a more serious note, they need a healthy platform to sell third party games and reap that sweet 30% distribution tax. I honestly don't know why people keep overlooking this. Missing BG3's hype last year or monkee this year can't be good in the long run.
As long as Activision is making money Xbox is fine revenue wise (if the investors are satisfied) The problem will be next year when year over year Activision will have already been on the previous years and the yoy increase will be flat or negative. The stock holders will not be satisfied with flat or negative profits gains. Profits always need to go up for the investors of a huge company.
There is a lot of context missing here. We need to see how the numbers compare WITHOUT Activision's numbers in.
