Xbox Hardware Sales Decline 29% in Q2 While Game Pass Soars to New Heights
Overall gaming revenue declined by 7%, while Xbox subscriptions and services experienced a 2% increase
Microsoft has published its financial performance for the second quarter of its fiscal year, revealing a 7% decrease in total gaming revenue, with hardware sales dropping by 29%.
The figures:
For the quarter ending December 31, 2024:
- Revenue: $69.6 billion (up 12% year-over-year)
- More Personal Computing (including Xbox) revenue: $14.7 billion
- Operating income: $31.7 billion (up 10% year-over-year)
- Net income: $24.1 billion (up 10% year-over-year)
The highlights:
Microsoft achieved a strong quarter overall, fueled by its Cloud services which produced $40.9 billion (up 21% year-over-year). The company’s AI division also saw significant growth of 175% year-over-year, surpassing an annual revenue rate of $13 billion.
Despite a drop in gaming revenue, Xbox subscriptions and services grew by 2% thanks to “stronger-than-anticipated performance” from Activision Blizzard content, including the release of Call of Duty: Black Ops 6.
During the earnings call, Microsoft CEO Satya Nadella announced that Xbox Game Pass recorded an all-time high for revenue, with its PC subscriber base increasing by over 30%.
Nadella also disclosed that 140 million hours were streamed on