Microsoft‘s gaming division has reported mixed results for its second quarter of fiscal year 2025 (October-December 2024), showing growth in its subscription services but facing challenges in hardware sales.
Xbox’s Q2 2025 results:
- Overall gaming revenue decreased by 7% (8% in constant currency)
- Xbox Game Pass and content services grew by 2%
- Hardware revenue saw a substantial decline of 29%
- PC Game Pass subscriptions increased by 30%
- Cloud gaming reached 140 million streaming hours
Indiana Jones Reach to 4 Million Players
A bright spot in the quarter’s performance was the impressive debut of “Indiana Jones and The Great Circle.” Microsoft CEO Satya Nadella announced that the game has reached 4 million players since its release. While exact sales figures aren’t available due to the game’s inclusion in Xbox Game Pass, this player count represents a significant achievement for MachineGames’ new release, which has also garnered critical acclaim and multiple award nominations.
Game Pass Gain Momentum
Additionally, Xbox Game Pass for PC experienced a 30% growth last quarter, setting a new revenue record. This success can be attributed to a strong lineup of day-one releases including:
- Indiana Jones and The Great Circle
- Call of Duty: Black Ops 6
- Microsoft Flight Simulator
On the cloud gaming front, users logged 140 million hours of streaming. These metrics underscore Microsoft’s successful investment in subscription-based and cloud gaming services, even as traditional hardware sales face challenges.
Understanding the Hardware Decline
Speaking of hardware, the sharp 29% decline in hardware revenue during the holiday season is particularly surprising. For context, the same quarter in the previous year saw a 3% increase in hardware sales. This downturn could be attributed to Microsoft’s strategic pivot towards cloud gaming and multiplatform strategy, which may be influencing consumer purchasing decisions regarding physical consoles.
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