Microsoft has reported a major jump in sales for its Xbox division during its second fiscal quarter.
The company completed its acquisition of Activision Blizzard in October 2023, in the process taking ownership of franchises including Call of Duty, World of Warcraft, Diablo and Overwatch.
That was reflected by a significant rise in sales during the quarter ended December 31, with gaming revenue up 49% to $7.1 billion, including 44 points of net impact from the Activision deal.
Xbox content and services revenue rose 61%, driven by 55 points of net impact from Activision, while Xbox hardware revenue was up 3% year-over-year.
As spotted by games industry analyst MauroNL, Microsoft said in a new 10-Q filing that it now values the purchase price of Activision Blizzard at $75.4 billion – up from $68.7 billion originally forecast when the deal was announced in 2022.
The net impact of Activision Blizzard on Microsoft’s results last quarter was $2.1 billion in revenue and a $437 million operating loss.
Update
Microsoft CEO Satya Nadella offered the following comments on the company’s gaming division during its earnings call.
“This quarter we set all-time records for monthly active users on Xbox, PC, as well as mobile, where we now have over 200 million monthly active users alone, inclusive of Activision Blizzard games.
“With our acquisition we have added hundreds of millions of gamers to our ecosystem, as we execute on our ambition to reach more gamers on more platforms.
“With cloud gaming, we continue to innovate to offer more players more ways to experience the games they love where and when and how they want. Hours streamed increased 44% year-over-year.
“Great content is key to our growth, and across out portfolio I’ve never been more excited about our line-up of upcoming games.
“Earlier this month we shared exciting new first-party titles coming this year to Xbox, PC and Game Pass, including Indiana Jones, and we’ve also announced that we’re launching significant updates this calendar year to many of our most durable franchises, which bring in millions of players each month including Call of Duty, Elder Scrolls Online and Starfield.”
For the current quarter ending in March, Microsoft CEO Amy Hood forecast: “In gaming, we expect revenue growth in the low 40s, including approximately 45 points of net impact from the Activision acquisition.
“We expect Xbox content and services revenue growth in the low to mid 50s, driven by approximately 50 points of net impact from the Activision acquisition.
“Hardware revenue will decline year-over-year.”
Last week, Microsoft announced plans to lay off 1,900 staff across Xbox, Bethesda and Activision Blizzard. The figure represents roughly 8% of its overall gaming division, which has around 22,000 employees.
In a message sent to staff, Xbox boss Phil Spencer said the decision was taken after Microsoft and Activision Blizzard’s leadership teams “set priorities, identified areas of overlap, and ensured that we’re all aligned on the best opportunities for growth”.
Alongside the news, it was confirmed that Blizzard president Mike Ybarra and chief design officer Allen Adham are leaving the studio, and that its untitled survival game is no longer in development.
Former Call of Duty general manager Johanna Faries was named as Blizzard’s new president on Monday.
Laura Adams is a tech enthusiast residing in the UK. Her articles cover the latest technological innovations, from AI to consumer gadgets, providing readers with a glimpse into the future of technology.
