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3mo ago

Xbox Hardware Sales Drop 29% as Game Pass Hits Record Revenue

Microsoft's Q2 FY25 report shows declining console sales but highlights growth in Game Pass subscriptions and multiplatform game sales.

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Xbox Game Pass made record revenues throughout Holiday 2024, indicating the subscription service generated in excess of $1 billion--the previous record.
An image about Xbox hardware revenue down to second-lowest point in the last 10 years

Overview

  • Microsoft's gaming revenue fell 7% year-over-year in Q2 FY25, largely due to a 29% drop in Xbox hardware sales driven by lower console volumes.
  • Xbox Game Pass set a new quarterly revenue record, with PC subscriptions growing by over 30% and significant contributions from Call of Duty: Black Ops 6.
  • Call of Duty: Black Ops 6 became the top-selling game on both Xbox and PlayStation, with its launch quarter seeing more players than any previous franchise release.
  • Microsoft's multiplatform strategy, including releasing first-party games like Indiana Jones and the Great Circle on rival consoles, drove 64% of its December game sales on PlayStation.
  • Xbox Cloud Gaming also saw record engagement, with 140 million hours streamed during the quarter, as Microsoft focuses on high-margin services and long-term profitability.