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Microsoft reports a 7% revenue decline in Xbox Q2 2025 earnings

FY25 Q2 earnings for Microsoft show a 7% decline in gaming revenue due to lower Xbox sales but saw a 2% increase in content and services. Check out full details.

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Microsoft see Xbox hardware revenue decline due to low sales Photograph: (Microsoft)

Microsoft has revealed its FY25 Q2 earnings and reported a 7% decline ($530 million) year-over-year in the gaming revenue. This was primarily due to the Xbox hardware sales which already struggled to compete in the console market and saw a 29% YoY decline. The content and services revenue, however, saw a 2% increase thanks to the Game Pass.

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“Black Ops 6 was the top-selling game on Xbox and PlayStation this quarter and saw more players in its launch quarter than any other paid release in franchise history. And we saw rave reviews of Indiana Jones and the Great Circle, which has already been played by more than four million people,” said Microsoft CEO Satya Nadella during the earnings call.

Microsoft predicts Xbox revenue to be back on track by March

Further talking about the situation, the company expects Xbox revenue to be back on track by the end of March 2025 with a YoY increase in single digits. The same is predicted for content and services which is one surprising aspect.

Back in late 2023, Microsoft completed the Activision acquisition which was a huge investment reaching over $70 billion. The goal was to further increase gaming revenue with popular IPs like Call of Duty and other games. However, despite a big launch, the result for FY25 Q2 earnings is likely lower than anticipated.

The hardware sales decline for the Xbox Series X/S will likely be persistent moving forward considering Microsoft’s decision to bring all games across multiple platforms. Speaking of bringing games across multiple platforms, Nadella also revealed that PlayStation and Steam also saw an increase of over 60% YoY which is a good sign.

Also Read: Microsoft reveals best-selling Xbox games of 2024

FAQ

What does it mean for gamers?

With Microsoft going multi-platform gamers will likely have access to some incredible game releases, especially Game Pass subscribers who will get first-party games on release on Day 1. The recent Xbox Developer Direct showcased some popular games like Doom and Ninja Gaiden 4 also coming to PS5.

Are Xbox games coming to PS5?

It may be a hard pill to swallow but for now, the console wars may be over. All Xbox exclusive games will likely become available across PS5 soon, as Phil Spencer said ‘no red lines’.

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