Microsoft today released its earnings report for the fourth quarter of the 2024 fiscal year, which included details on how Xbox is performing. According to the company’s financial reports, Xbox content and services revenue is up by 61%, which is largely due to the impact of the company’s $69 billion acquisition of Activision Blizzard. The transaction completed in October 2023.
In addition to Xbox content, gaming revenue is up 44%, with 48 points of impact from the Activision acquisition; the 61% of growth also shows 58 points of impact from the same event. However, Xbox is down in areas that aren’t impacted by the acquisition, namely hardware. According to Microsoft, Xbox’s hardware revenue has dropped by 42% in Q4 FY24. Total revenue for the More Personal Computing segment (under which gaming and Xbox is nested) is at $15.9 billion, with operating income at $4.9 billion.
This follows a trend with the rest of Microsoft’s recent earnings reports, at least with regards to Xbox — in the previous quarter, Xbox hardware had fallen 31% while content and services revenue grew by 62% (with 61 points of net impact from Activision). Hardware saw a 3% uptick in Q2, but had also dropped by 7% in Q1 of FY24. This is likely not a Microsoft-only issue, as several of the recent Circana reports have shown overall hardware sales dropping by double digits.
Microsoft CEO Satya Nadella said during the company’s earnings call that part of the growth was the increased visibility of Microsoft properties, citing the company’s showcase during the Summer Game Fest and the debut of the Fallout TV show on Prime. CFO Amy Hood said that the 61% growth was slightly above expectations, and that the growth in first-party publishing offset slightly less impressive third-party sales. Hood also added that Microsoft expects growth in the mid-30s for gaming for the first quarter of FY2025.