Xbox Revenue Grew 10% YoY, Hardware Revenue Falls 22%, Game Pass Nears $5B - Sales
by William D'Angelo , posted on 30 July 2025 / 16,072 Views
Microsoft has released its earnings report for the fourth quarter of the 2025 fiscal year, which ended up June 30, 2025.
Xbox gaming revenue increased by 10 percent year-on-year to $5.53 billion. This is better than the forecast, which expected growth in the mid single digits percent.
Xbox content & services revenue increased 13 percent compared to the same quarter a year ago, driven by growth in first-party content and Xbox Game Pass. This is better than the forecast, which expected growth in the high single digits percent.
Xbox hardware revenue dropped 22 percent year-on-year. This is despite Microsoft increasing the price of Xbox consoles on May 1.
For the fiscal year, Xbox gaming revenue increased nine percent or $2.0 billion to $23.46 billion due to growth in Xbox content and services, offset in part by a decline in Xbox hardware. Xbox content & services grew 16 percent due to the impact of the Activision Blizzard acquisition and Xbox Game Pass. Xbox hardware revenue fell 25 percent due to a "lower volume of consoles sold."
Overall for the quarter, Microsoft reported for the quarter revenue was up 18 percent year-over-year to $76.4 billion, operating income increased 23 percent to $34.3 billion, and net income was up 24 percent to $27.2 billion.
For the fiscal year, Microsoft revenue for the full fiscal year increased 15 percent to $281.7 billion, while operating increased 17 percent to $128.5 billion and net income grew 16 percent to $101.8 billion.
Microsoft CEO Satya Nadella revealed Xbox was the top publisher on Xbox and PlayStation during the quarter, Call of Duty: Black Ops 6 has surpassed 50 million players, Minecraft had a record in terms of monthly active usage in revenue, and Xbox Game Pass generated nearly $5 billion during the fiscal year. Xbox also has nearly 40 games in development.
"When it comes to gaming we have 500 million monthly active users across platforms and devices," said Nadella. "We are now the top publisher on both Xbox and PlayStation this quarter with successful launches of Forza Horizon 5 [on PS5] and Oblivion Remastered.
"The Call of Duty franchise has never been stronger. 50 million people have played [Call of Duty] Black Ops 6, total hours surpassed two billion. Minecraft saw record monthly active usage in revenue thanks in large part to the Minecraft movie. And we have nearly 40 games in development, so much more to come.
"We have surpassed over 500 million hours of gameplay streamed via the cloud this year and Game Pass annual revenue was nearly $5 billion for the first time."
Microsoft's forecast for the quarter ending September 30, 2025 expects total Xbox revenue to decline in the mid to high single digits percent year-on-year "against a strong prior year comparable." Xbox content & services is expected to decline in the mid single digits percent. No forecast was given for Xbox hardware.
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 follow the author on Bluesky.
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Congrats, teams! Also, you're fired.
This shouldn't be as funny as it is.
That has been MS motto for a while but then again, each year their head count grows. I guess if you kind of think about it MS love to get rid of business units that just not making enough or any profits and hire into new ones like some prospector looking for gold. If that hold comes up bust, they move to a different spot and start digging.
Sadly again, no profit, hardware and GP numbers.
Revenue up is a "positive piece of data", no doubt, but a very shallow one once again with no possibility whatsoever to draw any conclusions about the health of the division.
The revenue figure ups were highly likely mostly driven by:
• GP price increase in July 2024 (+18%)
• +1m GP subs since February '24
• and especially Playstation releases
Which resulted in +9% total gaming revenue.
Which I don't think is healthy and I personally perceive as still fragile state of the division.
I mean the whole company made 101 billion dollars in profits, safe to say at least a couple of billion were from xbox..
I personally don't think so, tbh.
But since you and I don't have any proof of anything, we have to accept everyone's claim as possibly true (or false).
When was the last time MS did any profit margin for the gaming division especially Xbox. That ship sailed a long time ago so I doubt they will start that again unless its making huge profits over and above what the market would expect.
Exactly.
Sarah Bond said that operating income has increased by 34%.
What she doesn't tell, apart from the raw number, is that operating income in it of itself doesn't have to be a positive number anyway.
I don't think MS break down profit numbers for each division, unless I'm missing something. I don't believe a lack of sharing gaming profits is indicative of not being profitable.
What could be the best way to show people you're profitable?
I had a clue.
Like Nintendo and Sony have for decades, too.
Go ahead and tell them how much you need to know this information. I'm sure they will care a lot for all the console war arguments it will be used for.
That's funny.
Since especially Microsoft has always been the most aggressive warmonger in the first place.
What an asinine take.
I beg to differ. Sony has been the most aggressive for 3 of the 4 generations they have competed.
Apart from the buyouts of Zenimax Media and ActivisionBlizzardKing, leaked documents during the FTC trial showed that Microsoft also tried to
buyout:
• Sega, Capcom, IOI, Valve, Nintendo, CD Project Red
and wanted to secure 3rd parties exclusively to GP from the likes of From Software.
Additionally, Phil Spencer in 2021 initially planned to make every Bethesda game exclusive to Xbox, which they had actually started doing with Redfall and Starfield.
No, buddy, I don't agree with you, at all, not even in the slightest.
Leaked documents only tell half the story and as we have all seen, plans change constantly.
What is the reality of the situation currently? Xbox is putting all their games on multiple platforms.
If your argument is being held together by some leaked documents, which most of the things never happened, then that's not a good argument.
I'm referring to what has actually occurred, not using 'what if' scenarios to make a point.
"Xbox is putting all their games on multiple platforms."
And it's not hard to tell why, it's really not.
Jul: 17
Aug: -38
Sep: -55
Oct: -23
Nov: -25
Dec: -47
Jan: -49
Feb: -21
Mar: -20
Apr: -2
May: -39
Jun: -53
These are the year-on-year percentages of X|S hardware sales estimates in their now closed fiscal year.
Which results in an average of -29.58%.
That's an interesting but close deviation from their official -22% number.
With many, at least 4, possible reasons behind it.
Hardware ~500k
MS also announced they have joined the elusive $4T club with Nvidia.
