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Microsoft Gaming Records Significant Growth in Q1 Fiscal Year 2025

Microsoft has released its financial results for the first fiscal quarter of 2025, ended September 30, 2024, highlighting notable growth in the gaming division. The company's total revenue reached $65.6 billion, a 16% increase year-over-year, with a net income of $24.7 billion, representing an 11% growth.

Highlights of the Gaming Division

• Total Gaming Revenue: $5.62 billion, a 43% increase compared to the same period last year.

• Xbox Content and Services Revenue: 61% growth, primarily driven by the acquisition of Activision Blizzard.

• Xbox Hardware Revenue: 29% decrease, reflecting a decline in console sales.

The acquisition of Activision Blizzard, completed in October 2023 for $75.4 billion, played a crucial role in this growth, contributing $1.69 billion to the quarter's revenue.

Impact of the Activision Blizzard Acquisition

The integration of Activision Blizzard brought popular franchises such as Call of Duty, World of Warcraft, and Diablo into the Microsoft ecosystem, significantly strengthening its gaming portfolio. Xbox content and services revenue increased 61% year-over-year, with 53 percentage points of that growth directly attributed to the acquisition.

The launch of "Call of Duty: Black Ops 6" was a milestone, becoming the largest franchise launch in terms of players on day one and setting a new record for Xbox Game Pass subscriber additions in a single day.

Xbox Game Pass Performance

Xbox Game Pass continued to show strength, setting a new record for total revenue and average revenue per subscriber in the first quarter. The inclusion of popular titles like "Call of Duty: Black Ops 6" on the service from launch contributed to this growth.

Decline in Hardware Sales

Despite the growth in content and services revenue, Xbox hardware sales fell 29% year-over-year, totaling approximately $525 million. This decline reflects a decrease in demand for consoles, although Xbox Series X sales surpassed those of the Series S in the United States, according to a Circana report from September 2024.

Future Prospects

Microsoft CEO Satya Nadella expressed optimism about the future of the gaming division, highlighting the company's focus on building a business positioned for long-term growth, driven by higher-margin content and services.

Microsoft plans to continue diversifying the ways players access its content, with future releases such as "DOOM: The Dark Ages," "Fable," and "South of Midnight" slated for 2025.

Source: Microsoft

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