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

Microsoft’s Q1 2025 net are in, and the results amusement that Microsoft’s bundle gaming revenues are mode up adjacent arsenic Xbox hardware gross is declining.

The institution says that its Xbox contented and services gross grew 61 percent year-over-year from the erstwhile 4th — a fig is driven by “53 points of nett interaction from the Activision acquisition,” according to the company’s property release. But hardware revenues again declined, down 29 percent this quarter, which whitethorn beryllium influenced by Microsoft’s continued strategy to marque its games disposable more wide than conscionable Xbox consoles.

During the quarter, Microsoft introduced its caller Xbox Game Pass “Standard” tier and a price hike for Xbox Game Pass Ultimate. Q1 besides saw the accomplishment of Call of Duty: Modern Warfare III on Xbox Game Pass, but this 4th doesn’t see the interaction of Call of Duty: Black Ops 6, which launched past week.

The company’s Intelligent Cloud part was besides a agleam spot, with full revenues up 20 percent year-over-year to $24.1 cardinal driven by Azure. Azure and different unreality services gross was up 33 percent, “including 12 points” from request for its AI services. Productivity and Business Processes, which includes its Office products, was up 12 percent year-over-year to $28.3 cardinal successful revenues.

Microsoft’s OEM and Devices gross — which are present reported unneurotic — were up 2 percent. However, that fig was driven by “growth successful Windows OEM” and “partially offset by a diminution successful Devices,” Microsoft says.

Microsoft, similar galore different companies, is investing heavy successful AI-focused features and tools close now, particularly to improve Copilot. “AI-driven translation is changing work, enactment artifacts, and workflow crossed each role, function, and concern process,” Satya Nadella, president and CEO of Microsoft, says successful a statement. “We are expanding our accidental and winning caller customers arsenic we assistance them use our AI platforms and tools to thrust caller maturation and operating leverage.”