Microsoft's results for the final quarter of its financial year are in, showing continued growth in overall gaming revenue while Xbox console sales are declining again.
The acquisition of Activision Blizzard was cited as a key factor in the growth, with revenue from Call of Duty and other publisher properties now converted from third-party to first-party.
Xbox growth contributed to a strong year for Microsoft overall, with total revenue from all of its businesses up 15% year over year to nearly $65 billion.
The numbers
For the three months ended June 30, 2024
- Revenue: $64.7 billion (15% more than the same period last year)
- Operating income: $27.9 billion (up 15%)
- Net income: $22 billion (up 10%)
- Gaming Revenue: Up 44%
- Xbox Content and Services Revenue: 61% increase
- Xbox hardware revenue: Down 42%
The interesting aspects
Xbox content and services revenue saw the largest growth within Microsoft’s More Personal Computing division, up 61% compared to the same quarter last year. Growth is expected to be between 50% and 65% in the next quarter, again thanks to the acquisition of Activision.
In fact, the Activision acquisition boosted gaming growth far beyond that of any other segment of personal computing, with the next largest growth coming from search and news advertising, up 19%.
More Personal Computing's total revenue increased 14% year-over-year to $15.9 billion.
Xbox hardware revenue fell 42% year-over-year. Microsoft CFO Amy Hood told investors during the earnings call that it is expected to decline again in the next quarter (three months ending September 30, 2024).
Hood also added that first-party game content performed better than expected, although this was partially offset by the performance of third-party content (and again, Activision games are no longer third-party).
Elsewhere on the earnings call, CEO Satya Nadella said Xbox has 500 million monthly active users across all platforms and devices, and that the platform's slate of upcoming releases has “never been stronger” following its June unveiling.
Xbox only had one new software release last quarter (Ninja Theory's Hellblade 2: Senua's Saga), but Nadella highlighted successes in other areas, including the Fallout TV show, which ranks as the second most-watched Amazon Prime Video series of all time and quintupling the number of hours played of Fallout titles on Game Pass.
Microsoft also reported its annual results, with total revenue up 16% to $245.1 billion. The company's operating profit rose 24% to $109.4 billion, while net income rose 22% to $88.1 billion.