Summary
- Xbox hardware sales continued to drop by 29% in Q1 FY25, but software and services revenue increased by 61% year-on-year.
- Despite ongoing hardware revenue decline, strategic moves like giving Game Pass Ultimate subscribers day-one access to major titles are paying off.
- Microsoft's gaming business saw a 43% revenue growth overall in the first quarter, with 43 points of net impact contributed by the Activision deal.
Xbox parent Microsoft has shared that the console giant experienced another downward trend in hardware sales for Q1 FY25, continuing its woes from the previous quarter. On the software and services front though, Xbox emerged as stronger compared to the same period last year.
For the past several years, Xbox console sales have lagged behind those of rivals PlayStation and Nintendo by a significant margin. In July, when Microsoft revealed its FY24 financial report, Xbox hardware revenue was spiraling downwards at the rate of 42% year-on-year for Q4. The latest results show that, although the decline hasn't stopped, the speed at which it was happening before has been slowed down.
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In its Q1 FY25 earnings report, Microsoft announced some bittersweet stats for Xbox. While the hardware revenue in the first quarter went down by 29% year-on-year, Xbox's content and services business shot up by 61% year-on-year during the same period. Interestingly, the Xbox parent shared that 53 points of net impact here were contributed solely by the Activision deal. On the whole, Microsoft's gaming business underwent a 43% revenue growth in the first quarter, with 43 points of net impact coming from the Activision takeover again.
Xbox Hardware Sales Continue to Dwindle, While Xbox Game Pass Business Prospers
Although the rate of decline is less than last time, the dip in hardware revenue is an issue Xbox has yet to effectively contain. While big acquisitions have bolstered the Microsoft-owned brand's pipeline, the right strategy to leverage that and improve console sales is still easier said than done. On the other hand, its recent decision to let Game Pass Ultimate subscribers have day-one access to Call of Duty: Black Ops 6, a major first-party title, seems to be paying off very well. As a consequence, the newest COD entry has achieved the distinction of being the game with the most day-one players as well as that of being the game to bring the most Xbox Game Pass subscribers on launch day.
As more first-party studio games like Indiana Jones: The Great Circle appear on the horizon, the times ahead look exciting for Xbox fans, especially Game Pass Ultimate subscribers who would get day-one access to them. How these titles perform and how they impact Xbox's growth will be interesting to keep an eye on over the forthcoming year.
- Brand
- Microsoft
- Operating System
- Proprietary (Windows-based)
- Storage
- 1TB WD SN530 NVMe SSD
- VR Support
- No
- Resolution
- 720p - 4K UHD
- App Store
- Microsoft Store
Microsoft's ninth-generation console, the Xbox Series X is a powerful machine that can support 4K resolution and 60 fps, depending on the game. Released alongside the Xbox Series S, the Series X has a Custom AMD Zen 2 CPU, a Custom RDNA 2 GPU, and 16 GB of RAM.
Checkbox: control the expandable behavior of the extra info- Wi-Fi
- Wi-Fi IEEE 802.11ac
- Ports
- AC, Ethernet, USB x3, Storage Expansion, HDMI
- HDR Support
- Yes
- Original Release Date
- November 10, 2020
- Hardware Versions
- Xbox Series X
- Original MSRP (USD)
- $499
- Weight
- 9.8 LBS
- Dimensions
- 151 x 151 x 301 mm
- Processor
- Custom AMD 8-core Zen 2 3.8 GHz