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Microsoft Gaming Hits $5.7 Billion in Q1 2025 as Xbox Game Pass and Cross-Platform Strategy Drive Growth


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Microsoft’s gaming division is off to a strong start in 2025, posting $5.7 billion in revenue for the first quarter, a 5% year-over-year increase.


According to the company’s latest earnings report, the January–March performance represents a $270 million gain compared to Q1 2024, largely fueled by digital services and key franchise engagement.


Game Pass, Minecraft, and Call of Duty Lead the Charge


  • Digital content and services revenue rose 8%, powered by Xbox Game Pass, Minecraft, and Call of Duty.

  • Microsoft CEO Satya Nadella highlighted Minecraft's resurgence, noting a 75% surge in weekly active users following the April 4 premiere of The Minecraft Movie starring Jack Black.

  • Meanwhile, Call of Duty: Black Ops 6, released late last year, continues to deliver both in sales and in-game revenue.


Console Sales Cool Down


  • While services surged, Xbox hardware sales declined by 6%, showing a year-over-year dip for the Series X and Series S consoles.


Microsoft Beats Expectations Across the Board


  • Total company revenue: $70.1 billion (+13% YoY)

  • Net income: $25.8 billion (+18% YoY)

  • Earnings per share: $3.46 (vs. analyst estimate of $3.22)


Microsoft also claimed it was the top publisher for pre-orders and pre-installs across both Xbox and PlayStation platforms during Q1.


Cloud Gaming and PC Game Pass Surge


  • Xbox Cloud Gaming surpassed 150 million hours of usage in Q1.

  • PC Game Pass revenue grew 45% year-over-year, showing that Microsoft’s push beyond the console ecosystem is paying off.


Cross-Platform Strategy Expands Reach


As part of a strategic shift, Microsoft is increasingly launching Xbox exclusives on other platforms:


  • “Indiana Jones and the Great Circle” (Bethesda) recently landed on PlayStation 5

  • “Forza Horizon 5” and “Avowed” (Obsidian) also boosted engagement and helped strengthen first-party output

  • More games are arriving through Xbox Game Preview, including “Towerborne” from Stoic

  • Bethesda’s remastered The Elder Scrolls IV: Oblivion launched in April, and id Software’s DOOM: The Dark Ages is slated for May


The company’s evolving approach—leaning into Game Pass, cloud gaming, and multiplatform publishing—is paying off both financially and strategically.

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