Microsoft has reported a 7% revenue decline for its gaming division during its second fiscal quarter.
The division generated $6.6 billion in revenue during the three months ended June 10, 2025, which was down $530 million year-over-year.
The decline was attributed to a 29% drop inXboxhardware revenue, driven by a lower volume of consoles sold during the quarter.
Xbox content and services revenue increased 2% year-over-year, fueled by growth in Game Pass.
Microsoftcompleted its acquisition of Activision Blizzardin October 2023, in the process taking ownership of franchises including Call of Duty,World of Warcraft, Diablo andOverwatch.
That was followed by a significant rise in sales for its gaming division during Q2 last year, as well asthe following three quarters.
The three months ended in December 2024 mark the first time it has been possible tocompare quarterssince the completion of the $75.4 billionActivisiondeal.
Microsoft will hold its Q2 earnings conference call at 2.30pm PT / 5.30pm ET / 10.30pm GMT, when CEOSatya Nadellamay offer more insight into the Xbox division’s performance, and the company will provide guidance for Q3.
Update29th Jan 2025 / 11:48 pm
Nadella ran through the Xbox division’s quarterly highlights during the company’s earnings call.
“We’re focused on improving the profitability of the business in order to position it for long-term growth driven by higher margin content and platform services, and we are delivering on this plan,” he said.
Nadella claimedBlack Ops 6 enjoyed a record breaking launch quarteras it topped software sales on both Xbox andPlayStation.
He also said thatIndiana Jones and the Great Circlehas attracted over four million playerssince its release in December.
“We also continued to see strong momentum forXbox Cloud Gaming, with a record 140 million hours streamed this quarter,” Nadella added.
$465 million was spent on Microsoft games over December,making the company the world’s biggest publisheracross PC, PlayStation, and Xbox, according to data from Ampere which was published earlier today.
Microsoft has been putting increased focus on its multi-format strategy, and 64% of consumer spending on its games in December was on PlayStation formats (driven by Call of Duty).
Ampere said that Microsoft was comfortably ahead of second-placedElectronic Arts, which generated $366 million over the same period.
