Xbox Hardware Sales Fall as Game Pass and Activision Boost Revenue

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I just listened to Microsoft’s latest earnings call, and it’s a bit of a mixed bag for Xbox fans like me. While overall gaming revenue is up 9% compared to last year, which is great, they did say that Xbox console sales actually went down. It’s interesting to see those two things happening at the same time!

Honestly, things were a bit mixed for us lately. While we saw an overall revenue boost, it wasn’t from selling more Xbox consoles – those sales actually dropped by 25%. The good news is the Activision Blizzard acquisition and a ton of people signing up for Xbox Game Pass really helped to offset that. So, subscriptions and that big acquisition were the real drivers of our income this time around.

Microsoft didn’t focus much on gaming during the presentation, which was a bit surprising. They are, though, making significant investments in Artificial Intelligence and Cloud services. Cloud revenue, in particular, grew by 23% compared to last year, reaching $168.9 billion.

I was so excited to hear on the earnings call that Microsoft Cloud revenue just hit over $50 billion this quarter! That’s a huge jump – up 26% compared to last year – and it really shows how strong their platform is becoming, with more and more people wanting what they offer.

Okay, so Microsoft’s really dominating the cloud gaming scene with Game Pass. They did raise the price last year, and a lot of us weren’t thrilled, but it looks like enough people stuck around and kept their subscriptions going. That’s apparently helping them make up for any money they’re losing on consoles and other hardware. Basically, Game Pass is doing really well, even with the price increase.

Microsoft’s CFO, Amy Hood, announced that the company is focused on bringing excellent games to players on Xbox, PC, cloud gaming, and other devices. They’ve recently seen more people playing on PC and an increase in paid streaming time on Xbox.

With potential challenges looming for gaming hardware due to limited RAM, Microsoft and Xbox might be surprisingly well-prepared. Their collaboration with OpenAI and substantial cloud computing investments could give them an advantage over competitors.

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2026-01-29 03:34