Microsoft has reported a strong fiscal quarter, with CEO Satya Nadella emphasizing Xbox’s rising influence across the gaming industry. During the company’s quarterly earnings call, Nadella confirmed that Xbox is now the leading game publisher on both Xbox and PlayStation platforms, marking a significant achievement bolstered by the success of recent first-party titles and continued growth in Game Pass and cloud gaming services.
Key titles fueling this rise include Forza Horizon 5 and Oblivion Remastered, both of which contributed to Microsoft’s position at the top of publisher rankings across both console ecosystems. Nadella also cited the continued momentum of the Call of Duty franchise, noting that Black Ops 6 has already reached 50 million players, with over 2 billion hours logged collectively—a record high for the series under Microsoft’s ownership.
Another standout performer was Minecraft, which recorded its highest monthly active user numbers and quarterly revenue to date. The surge in popularity has been attributed in part to the promotional impact of the recently released Minecraft movie, which helped reenergize engagement with the title across various demographics.
Nadella highlighted broader strategic growth as well. Microsoft now has nearly 40 games in development, indicating a long-term commitment to expanding its first-party portfolio. Meanwhile, cloud gaming continues to gain traction, with over 500 million hours of gameplay streamed via the cloud in the past year. In what marks a major milestone, Xbox Game Pass annual revenue has approached $5 billion for the first time, demonstrating the growing significance of subscription services within Microsoft’s gaming strategy.
Overall, Microsoft’s gaming division saw a 10 percent year-over-year revenue increase, with Xbox content and services revenue growing 13 percent, or 12 percent in constant currency. This performance exceeded expectations, driven largely by first-party content and Game Pass engagement.
Despite the strong quarter, the company issued a cautious outlook for the upcoming period. Microsoft expects gaming revenue to decline in the mid to high single digits, largely due to challenging comparisons with last year’s strong performance. Xbox content and services revenue is similarly forecasted to decline in the mid single digits, reflecting a more tempered growth period following recent major launches.
Microsoft’s broader financials showed continued strength, with total quarterly revenue reaching $76.4 billion—an 18 percent increase over the same period last year. Operating income rose 23 percent to $34.3 billion, while net income increased 24 percent to $27.2 billion. Diluted earnings per share also saw a 24 percent increase, reaching $3.65. The company’s cloud business remains a major growth driver, with Microsoft Cloud revenue growing 27 percent to $46.7 billion, and Azure revenue surpassing $75 billion for the year.
As Microsoft prepares for the next fiscal period, it remains clear that gaming continues to play a central role in the company’s long-term strategy, with Game Pass, first-party development, and cross-platform dominance at the forefront of its gaming ambitions.
