What you need to know
- Microsoft’s financial results for FY25 Q1 are now out, detailing the company’s earnings across various divisions.
- Gaming revenue is up 43% year-over-year, with this growth coming from the acquisition of Activision Blizzard King.
- Xbox content and services revenue is up 61% year-over-year, with most of the growth coming from the acquisition.
- Xbox hardware revenue is down 29% year-over-year.
As someone who has been closely following the tech industry for decades, I must admit that I am not surprised by Microsoft’s impressive Q1 financial results for FY25. The acquisition of Activision Blizzard King has undeniably been a game-changer for the company, as evidenced by the significant growth in gaming and content services revenue.
It’s that time of the quarter where we get more financial results.
On Wednesday, Microsoft revealed their financial report for the first quarter of Fiscal Year 25 (FY25 Q1), which ended on September 30, 2024. They offered insights into the performance of their different divisions during this period. The gaming division saw a significant increase in revenue by 43% compared to the same quarter last year. This substantial growth can be attributed to Microsoft’s acquisition of Activision Blizzard King, which was finalized on October 13, 2023, and has contributed to the growth in the previous quarters as well (FY24 Q4, FY24 Q3, and FY24 Q2).
In a significant jump of approximately 61%, the income generated from content and services on Xbox increased compared to the previous year, with much of this growth attributed to Activision Blizzard King. However, it’s important to note that not all growth can be directly linked to them. Unfortunately, revenue from Xbox hardware declined by around 29% year-over-year. According to a recent report by Circana for September 2024, sales of the Xbox Series X are now surpassing those of the Xbox Series S in the United States.
Microsoft as a whole saw $65.6 billion in revenue for the quarter, which is up 16% year-over-year.
Developing…
How did Activision Blizzard King change Xbox revenue?
For the past year, we’ve witnessed a significant surge in gaming revenue for Microsoft, with consistent yearly growth compared to previous periods. This is attributed to the fact that Microsoft now considers Activision Blizzard King as an internal entity (first-party), instead of a third-party partner, following the completion of the acquisition. This change grants Microsoft ownership over popular franchises such as Call of Duty, Diablo, and World of Warcraft.
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2024-10-31 00:08