Advertisement
The acquisition of Activision Blizzard gives Microsoft a massive jump in sales in the Xbox sector – the console business is a cause for concern.
AI, cloud, advertising, Windows and Office products remain the sales and profit drivers at Microsoft: The US company generated more than 62 billion dollars (+17%) in the first three months of the year – the bottom line remains almost 22 billion dollars profit (+ 20%).
The gaming division shows an increase of 51 percent compared to the previous year, which mainly result from the integration of Activision Blizzard, which was completed in October 2023 after tough legal disputes. In particular, the ongoing demand for Call of Duty: Modern Warfare 3 brings joy. But a look at the revenue structure also shows: Without the almost $2 billion that Activision Blizzard games contribute, the Xbox division's games sales would be declining.
The subscription service Xbox Game Pass also benefits from the larger portfolio and strong brands: the action role-playing game, for example, was launched at the end of March Diablo 4 unlocked, more games will follow soon. Microsoft put the number of subscribers at 34 million in February.
Advertisement
The problem child is and remains the console business: Sales of Xbox hardware, i.e. consoles and accessories, have fallen by 31 percent – the sharpest decline since the market launch of Xbox Series X and Xbox Series S in November 2020. The company traditionally does not provide specific sales figures.
Analysts are worried that this downward trend will continue – with no prospect of a trend reversal. For noticeable impetus, attractive new products, a hardware upgrade and/or a significant reduction in the recommended retail price, which in the case of the top model Xbox Series X is still a sporty €550, would be needed. Nothing of this is in sight for the time being, especially since Sony Interactive is also sticking to its high-price policy for the PlayStation 5. Microsoft consequently expects hardware sales to fall in the current quarter (April to June).
Anyway: The implementation of four Xbox games for PlayStation consoles (including Sea of Thieves) has led to Microsoft now becoming one of the most important game suppliers for PS4/PS5 owners. According to CEO Satya Nadella, seven of the 25 most successful games in the PlayStation Store came from the Xbox universe at the beginning of April.
Always Fridays, always free: Subscribe to the GamesWirtschaft newsletter now!
GamesWirtschaft on social media: LinkedIn ● Facebook ● X ● threads ● Bluesky