During Microsoft’s most recent investor meeting, CEO Satya Nadella shared that the company has witnessed robust growth in its Xbox Cloud Gaming service, with an astounding 140 million hours streamed during the previous quarter. This impressive figure was achieved despite a 7% decrease in revenue for the Xbox division.
Microsoft usually prefers to maintain privacy regarding player statistics, subscriptions, and engagement metrics. Only during quarterly investor calls does the general public get a glimpse into how Xbox is performing behind closed doors.
Microsoft’s $70B gamble on Activision is paying off
Xbox Cloud Gaming remains in its testing phase, accessible exclusively to players who hold an Ultimate subscription to the Xbox Game Pass service. It’s worth noting that the extensive playtime on Cloud Gaming aligns with another milestone for Xbox this quarter: a 30% surge in PC Game Pass subscribers.
It appears that the surge in cloud gaming and PC Game Pass can be attributed to primarily one factor: the debut of Treyarch’s highly anticipated Call of Duty: Black Ops 6. This game was added to the Game Pass service in November. According to Nadella, speaking to investors, Call of Duty: Black Ops 6 was the best-selling game on Xbox and PlayStation during the last quarter, attracting more players in its launch quarter than any other paid release in the franchise’s history.
At its launch, Call of Duty became a playable game for subscribers of Xbox Game Pass Ultimate within the streaming service, marking the first time this franchise was accessible in this way. This move offered gamers who had once stepped away from the series or were newcomers a risk-free chance to explore the latest installment, Black Ops 6, and its free-to-play companion game, Call of Duty: Warzone. No longer did players require high-end gaming PCs, top-tier smartphones, or current-generation consoles to sample these titles; all they needed was an Xbox Game Pass subscription. Additionally, it became simpler than ever to persuade friends to join in the fun if they too were subscribers of this service.
It’s important to note that while Call of Duty has undeniably contributed to the growth of Cloud Gaming and Game Pass, it’s not the sole title responsible for this. Other games from Activision Blizzard King’s library, such as Spyro Reignited Trilogy and Crash Bandicoot N. Sane Trilogy, have also strengthened these services and are now accessible to cloud streaming audiences for the first time.
Cloud Gaming and the “This is an Xbox” campaign
Despite a strong performance from Cloud Gaming and PC Game Pass, Xbox’s total earnings decreased by 7% compared to last year. Notably, the sales of Xbox hardware dropped by 29%. In light of this trend, Xbox leader Phil Spencer has expressed concerns about waning consumer interest in console hardware even before the acquisition of Activision Blizzard King. During the FTC hearings, Spencer emphasized the significance of mobile gaming access, suggesting that the deal was not only about Call of Duty but also about popular games like Candy Crush.
In the last few years, Xbox has adopted strategies that reflect current trends, such as creating an Xbox portable gaming device and the “This is Xbox” marketing campaign. While some members of the Xbox community, who focus more on hardware, criticized the marketing campaign, it appears to have been a key factor in Microsoft’s growth strategy for the brand during the last quarter, resulting in its success.
Yearly releases of Call of Duty make it unreliable for consistently driving growth in cloud gaming and Game Pass on a quarterly basis. Instead, it appears that the other part of Xbox’s strategy is centered around bolstering these services with top-tier AAA games like Indiana Jones and the Great Circle or upcoming titles such as Avowed and South of Midnight.
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2025-01-30 08:39