Microsoft published yesterday the third quarter results of its 2024 fiscal year. The least we can say is that the company is doing well overall, since it achieved a turnover of $61.9 billion (+17% compared to compared to the previous year) and a net profit of $21.9 billion (+20% compared to last year) during the third quarter. On the Xbox side, the observation is generally the same, but these good results are essentially due to the acquisition of Activision.
Activision-Blizzard saves Xbox from the deficit!
Indeed, revenues linked to Xbox content and services, which include games and Xbox Game Pass, increased by 62% compared to the previous year. If this figure is quite impressive, it is however specified that it is mainly thanks to the revenues generated by Activision-Blizzard games and services:
Advertisement
Xbox content and services revenue increased 62% (61% at constant currency) driven by 61 points of net impact from the Activision acquisition
Overall, Microsoft's gaming revenues increased by 51%, again thanks to additional revenues from Activision Blizzard. The latter actually contributed 55 points to Xbox's growth, for a turnover of $1.97 billion in the third quarter.
Concretely, this means that without the acquisition of Activision-Blizzard, Xbox would be close to a deficit this last quarter.
Console sales down
If Xbox games and services are doing well thanks to Activision Blizzard, revenues linked to hardware and therefore console sales are in sharp decline. During this quarter, Xbox hardware was down 31% due to the drop in the volume of consoles sold.
Amy Hood, Microsoft's chief financial officer, says the company expects a further drop in revenue from Xbox hardware in the next quarter, but overall growth in the gaming branch of around 40%. while revenues linked to Xbox content and services are expected to increase by 50%, again thanks to the impact of Activision Blizzard.
Advertisement
As a reminder, Xbox confirmed last February the arrival of several of its games on PlayStation and Nintendo consoles. This fairly unique opening in gaming was described by the firm as being a test, and not a promise that other titles will follow.
If this could have had an impact on the drop in sales of Xbox consoles, it will be especially interesting to see how these PlayStation and Nintendo ports of first party Microsoft games will benefit it.