Microsoft’s Xbox Division Revenue Goes Up, Console Sales Keep Slipping
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- Microsoft’s Xbox division continues to generate revenue for the company.
- However, console sales are -6% year-over-year.
- Microsoft is reportedly not quitting the console market and will continue to produce new Xbox consoles.
Microsoft released its earnings for the third quarter of the fiscal year of 2025, and the Xbox division of the company has shown some growth. According to the press release, Xbox content and services revenue was up 8% compared to last year.
The company attributed this growth to the Xbox Game Pass, Call of Duty, and Minecraft. Gaming revenue as a whole grew 5%, but Xbox hardware revenue declined by 6%.
Digging deeper, the earnings call transcript revealed that PC Game Pass revenue grew by 45% compared to last year, while cloud gaming set a record with 150 million hours played for the first time. Additionally, the company claims that they’ve ended the quarter as the top publisher by pre-orders and pre-installs on both Xbox and PlayStation Store.
Minecraft’s success wasn’t overlooked. The company mentions that due to the success of the Minecraft movie, the game saw an increase of 75% in weekly active users compared to last year.
Despite declining Xbox hardware sales, Windows Central reported that the company has a handheld console ready for late 2025 and a next-generation Xbox for 2027. Outside of gaming, the company’s overall revenue increased by 13%, with the majority of it coming from Cloud, AI, and subscription products like Microsoft 365.
Microsoft’s expectations for its gaming division seem to be on the modest side. They expect gaming revenue growth to be in the mid-single digits, while Xbox content and services are expected to be in the high-single digits because of first-party content.
