- Microsoft’s gaming revenue increased by over 50% YOY.
- 55% of the growth came directly from Activision Blizzard.
- Xbox hardware suffered in Q3 FY2024, with revenue declining by 31% YOY.
Microsoft’s Xbox division is finally beginning to show promising results after the recent Activision Blizzard merger. Last quarter, the gaming giant reported a nearly 50% boost in revenue due to the acquisition.
Similar results have been reported again, with Microsoft confirming a 51% year-on-year improvement in gaming revenue for Q3 FY2024. However, hardware figures are much worse.
Why it matters: Sony continues to sell millions of consoles each quarter, breaking past the 50 million barrier recently.
While these figures bode well for Xbox overall, its hardware division continues to struggle. It is no secret that Microsoft has been unable to ship many consoles this generation despite offering a budget Xbox Series S.
According to its earnings release, Xbox hardware revenue fell by a whopping 31% year-on-year. Last quarter, Microsoft reported a 3% growth year-on-year in this segment, which was already poor.
The rapid decline in hardware popularity could be concerning for Microsoft’s position as a console manufacturer in the market. Meanwhile, Activision Blizzard contributed around 55% of the growth to overall gaming revenue.
This also means that gaming revenue would have declined without the publisher’s contribution.
Microsoft reported a record-high Q3 for its gaming division in FY2024.
Despite the concerning state of console sales, the company has confirmed work on the next-generation systems already. This means that it does not intend to rely solely on its role as a game publisher.
However, with each new financial report, it is clear that game publishing is now Microsoft’s primary strength in the gaming industry.
Microsoft will certainly be happy with the results. While the state of console hardware is concerning, the Activision Blizzard merger certainly justifies itself.
Perhaps Xbox will even consider being more aggressive in the hardware market in an attempt to bring these figures up to par with the rest of its gaming division, thanks to the renewed energy after Activision Blizzard’s recent impact.
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