Microsoft released the report for the first quarter of fiscal year 2025, which ended on September 30. We've highlighted the key indicators from the gaming division.
- Revenue from Microsoft's entire gaming business grew by 43% year-on-year, reaching $5.62 billion, with Activision Blizzard responsible for all 43% of this growth.
- The results exceeded the company's expectations — thanks in part to strong performance from both its internal studio games and third-party projects.
- Sales of Xbox gaming content and services surpassed $5 billion (+61% year-on-year). Excluding Activision Blizzard, the division's revenue would have increased by only 8%.
- Specifically regarding Activision Blizzard, the division earned $1.69 billion in the first quarter with operational losses of $440 million. These losses are associated with the ongoing integration of the company into Microsoft's structure.
- Quarterly revenue from gaming hardware dropped by 29% to around $525 million, linked to declining sales of Xbox consoles.
- In a conversation with investors, Microsoft CEO Satya Nadella noted that the company set a record for MAU (Monthly Active Users) in the first quarter.
- The Game Pass service also set a record for total revenue and average revenue per subscriber, though specific figures were not disclosed by the company.
- Despite the record launch of Call of Duty: Black Ops 6, Microsoft predicts a slight dip in gaming division income for the second quarter due to declining console sales. The company also does not expect revenue growth in the gaming content and services segment.
- This is largely because Game Pass revenues are recognized over a long period rather than instantly within the quarter. The same applies to sales of Black Ops 6 — as the game requires an internet connection, the majority of its revenue comes in the form of deferred payments.