During Microsoft’s latest earnings conference, CEO Satya Nadella announced that the performance of Game Pass has been exceptional. He commended the subscription platform for breaking records in both quarterly revenue and the expansion of its user base.
In Q2 of 2025, the number of subscribers for PC Game Pass increased by over 30% as stated by Nadella. This likely played a significant role in the 2% increase in revenue from Xbox content and services, which encompasses Game Pass subscriptions, sales of Xbox and PC games.
During the earnings conference, Nadella stated that Game Pass surpassed its previous quarterly revenue record and increased its PC subscriber base by more than 30%. He emphasized their efforts to expand the number of fully-paid subscribers across various platforms.
Additionally, Nadella commended the positive reception towards “Indiana Jones and the Great Circle” and the success of “Call of Duty: Black Ops 6”. To put it into perspective, the most recent version of “Call of Duty” held the number one spot on both Xbox and PlayStation platforms. Furthermore, Xbox Cloud Gaming was recognized for streaming over 140 million hours of gaming during that particular quarter, as acknowledged by Nadella.
According to Nadella, “Black Ops 6” was the most popular game on Xbox and PlayStation during the past quarter, with more players in its initial release compared to any other paid title in the series’ history. Additionally, he mentioned that “Indiana Jones and the Great Circle” has already been enjoyed by over 4 million people, receiving positive reviews.
Microsoft’s CFO, Amy Hood, predicts a modest increase in the coming period for the Xbox division, with growth rates estimated around 1-5%. Moreover, she anticipates a decrease in revenue generated from hardware sales. However, the anticipated growth for Xbox is primarily due to an uptick in software sales and the expanding subscriber base of Game Pass, which continues to grow steadily.
In terms of gaming, Hood predicts a modest increase in income, specifically within the range of 1% to 5%. This growth is anticipated to be fueled by Xbox content and services, particularly first-party content and Xbox Game Pass. As for hardware, there will likely be a decrease compared to last year.
It’s important to point out that even though Xbox generated profits from content and services, there was a significant 29% drop in revenue for Xbox hardware reported by Microsoft. This decline resulted in the total revenue for the Xbox division being 7% lower than it was during Q2 of 2024.
It’s possible that the decline in console sales, as indicated by Circana analyst Mat Piscatella, could be influenced by Microsoft’s recent purchase of Activision Blizzard for approximately $69 billion. This significant acquisition might have impacted their reported revenue.
As a fervent supporter, I’ve been thrilled by Nadella’s accolades for Game Pass, particularly its success on PC. However, rumors persist that developers might suffer financially by including their games in this subscription service. According to recent whispers, some creators anticipate losing approximately 80% of their Xbox sales once their titles are incorporated into the subscription model.
Games that work across multiple platforms appeared to gain significant advantages upon joining Game Pass, particularly in terms of multiplayer. Notably, sales increased not just on Xbox but also on PlayStation due to the expansion of player communities through Game Pass.
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2025-01-30 17:11