Microsoft’s latest financial report shows that the Activision Blizzard acquisition drove strong gaming growth, despite struggling Xbox hardware numbers.
The reports covered three months ending September 30th and saw a 16% year over year overall revenue rise to $65.6 billion. For Xbox content and services, including Activision Blizzard titles, that revenue was up 61% year over year.
Microsoft CEO Satya Nadella said, “We set new records for monthly active users in the quarter as more players than ever play our games across devices and on the Xbox platform”. The Q1 results also showed record revenue and average revenue per subscriber for Xbox Game Pass, according to the CEO.
He also notes that unit sales on PlayStation and Steam were +60% YoY, which “speaks to our strategy of meeting gamers where they are” with multiplatform releases, which was one of the things Microsoft promised amid the acquisition efforts.
Still, it wasn't all good news, as Xbox hardware struggled with a 29% decline over the same period last year. Microsoft CFO Amy Hood says that “in gaming, we expect revenue to decline in the high-single digits due to hardware. We expect Xbox content and services revenue growth to be relatively flat”.
Still, there are some bright spots in this report, and the Activision Blizzard acquisition is a big part of the gaming side of that. The future forecast does seem to be more cautiously optimistic, while acknowledging short-term growth May slow, while they prioritize long-term growth.
