Microsoft’s gaming revenue keeps going up, even though hardware sales are down

Microsoft’s Q1 2025 earnings are in, and the results show that Microsoft’s software gaming revenues are way up even as Xbox hardware revenue is declining.

The company says that its Xbox content and services revenue grew 61 percent year over year from the previous quarter — a figure driven by “53 points of net impact from the Activision acquisition,” according to the company’s press release. But hardware revenues again declined, down 29 percent this quarter, which may be influenced by Microsoft’s continued strategy to make its games available more widely than just Xbox consoles.

During the quarter, Microsoft introduced its new Xbox Game Pass “Standard” tier and a price hike for Xbox Game Pass Ultimate. Q1 also saw the arrival of Call of...

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