Microsoft reports 51% rise in Q3 gaming revenue thanks to Activision Blizzard, but console sales plummet

Microsoft has released its financial report for the third quarter ended March 31, 2024. Here is how the company’s video game division performed in the three-month period.

Activision Blizzard drives Xbox's revenue growth in Q3, but console sales plummet

Call of Duty: Modern Warfare III Zombies

  • According to its new earnings release, Microsoft’s gaming revenue reached $5.45 billion in Q3, up 51% year-over-year.
  • The growth was largely driven by Activision Blizzard and, in particular, Call of Duty. Without this subsidiary, revenue would have fallen 4% compared to the same period last year.
  • Activision Blizzard generated $1.97 billion in revenue and $350 million in operating loss. According to Microsoft CFO Amy Hood, the company “saw better-than-expected performance of Activision titles” in the third quarter.

  • As a result, Xbox content and services revenue increased by 62% year-over-year. Activision alone contributed 61 points of net impact.
  • On the negative side, Xbox hardware revenue decreased by 31% year-over-year to $429 million, driven by lower volume of consoles sold.
  • Here is some vague wording about the gaming division’s performance from Microsoft CEO Satya Nadella: “We set third quarter records for game streaming hours, console usage, and monthly active devices.”
  • He added that Game Pass subscribers played Diablo IV for over 10 million hours within the first 10 days of its addition to the service. This was one of Microsoft’s “biggest first party Game Pass launches ever.”
  • As for the fourth quarter, the company expects its gaming segment to grow in the low to mid-40s, still largely driven by the net impact from the Activision Blizzard acquisition.
  • Hood also noted that “hardware revenue will decline again year-over-year.”
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