Xbox Q2 2025 Earnings Results Show Revenue Decline, But Revenue Growth With Game Pass

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In the second quarter of 2025 (from October to December 2024), Microsoft’s data shows a decrease in Xbox’s gaming revenue, however, there was a modest increase in revenue generated through Game Pass.

Cut to the Chase

Xbox’s key points for Q2 2025 are:

  • Gaming revenue declined 7% (down 8% CC)
  • Xbox content and services revenue grew 2% driven by growth in Xbox Game Pass
  • Xbox hardware revenue declined 29%

What Does it Mean?

Assessing the long-term implications of quarterly financial reports can be tricky since they don’t offer a comprehensive view of the company. For instance, the 2% increase in Xbox content and services revenue might suggest a positive trend for Xbox Game Pass. However, considering Call of Duty: Black Ops 6 was highly anticipated and released during some months, one might expect a more pronounced rise. Nevertheless, this growth rate aligns with Microsoft’s projected 2% increase.

Hopefully, the decrease in Xbox’s revenue will improve over the next few months due to their new approach – making their games available on multiple platforms. This move is expected to boost their earnings, although it’s a bit unexpected given the strong performance they had during the last quarter with Call of Duty.

The drop in Xbox’s hardware income, amounting to 29%, is quite unexpected, particularly during the holiday season. To put it in perspective, Xbox hardware sales increased by 3% during the same period last year. However, given that Xbox is now prioritizing cloud services, it’s likely that this shift may lead to a reduction in hardware sales.

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2025-01-30 00:48