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3mo ago

Microsoft Gaming Revenue Climbs 5% as Game Pass and Cloud Services Dominate

Q3 2025 results reveal declining Xbox hardware sales offset by surging content and services revenue, with Game Pass usage hitting new milestones.

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Overview

  • Microsoft reported $5.7 billion in gaming revenue for Q3 2025, a 5% year-over-year increase, driven by an 8% rise in content and services revenue.
  • Game Pass usage set records, with Xbox Cloud Gaming surpassing 150 million hours played and PC Game Pass revenue up 45% year-over-year.
  • Xbox hardware revenue declined 6%, reflecting Microsoft's shift away from consoles toward a software and services-driven business model.
  • Microsoft ranked as the top publisher on both Xbox and PlayStation stores for pre-orders and pre-installs during the quarter.
  • The company announced upcoming price increases for Xbox hardware and first-party games, while Nintendo prepares to launch its next-generation Switch 2 in June.