Danielle Riendeau, Editor-in-ChiefNovember 1, 20242 Min ReadXbox logo on a dark backgroundvia MicrosoftAt a GlanceMicrosoft touted strong Game Pass numbers and Call of Duty launch, but also reported a hardware revenue decline.Microsoft has released its first quarter report for the 2025 fiscal year, shedding light on the company's financial performance for the three-month period ending September 30, 2024. Overall Xbox hardware revenue is down 29 percent (continuing the downward trend), but game revenue was overall up 43 percent, thanks in large part to its major Activision Blizzard acquisition and the robust library that the publisher brought to the table.That 43 percent growth includes 43 points of net impact from the Activision deal, as outlined in Microsoft's earnings presentation. Xbox content and services revenue grew 61 percent (including 53 points of net impact from the acquisition). The Activision Blizzard merger is clearly showing a massive impact on the division, shoring up some of the slack from falling hardware revenue. It's shown impact in other ways, too: Microsoft haslaid off over 2,500 game workersandshuttered multiple studiossince the turn of the year.Microsoft CEO Satya Nadella noted that, one year after closing the big deal, "we are focused on building a business positioned for long-term growth, driven by higher-margin content and services."Gaming revenue grows at Xbox, despite the falling hardware numbersNadella noted Microsoft set "new records" for monthly active users in the quarter, and that Game Pass set a new Q1 record for "total revenue and average revenue per subscriber." Call of Duty Black Ops 6, which launched last week, was singled out as the "biggest Call of Duty release ever, setting a record for day one players, as well as Game Pass subscriber adds on launch day."Despite the praise, Microsoft avoided sharing exactly what those record numbers were for all of the above.Interestingly, Nadella added that unit sales for the game were also up significantly on PlayStation and Steam: to the tune of 60 percent year-over-year."This speaks to our strategy of meeting gamers where they are by enabling them to play more games across the screens they spend their time on," said Nadella. This is consistent with Nadella's recent remarks on Xbox's multiplatform prospects.Read more about:Financials[Company] XboxAbout the AuthorDanielle RiendeauEditor-in-Chief, GameDeveloper.comDanielle is the editor-in-chief of Game Developer, with previous editorial posts at Fanbyte, VICE, and Polygon. Shes also a lecturer in game design at the Berklee College of Music, and a hobbyist game developer in her spare time.See more from Danielle RiendeauDaily news, dev blogs, and stories from Game Developer straight to your inboxStay UpdatedYou May Also Like