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Xbox FY24 Q2 gaming revenue up 49% year-over-year, driven by impact of Activision Blizzard acquisition

 New Xbox Logo.
New Xbox Logo.

What you need to know

  • Microsoft shared its financial results for FY24 Q2, the quarter ending on Dec. 31, 2023.

  • Gaming revenue is up 49% year-over-year.

  • Xbox content and services revenue is up 61% year-over-year.

  • Xbox hardware revenue is up 3% year-over-year.


The latest financial results are in, with some long-awaited earnings that finally factor in an acquisition almost two years in the making.

Microsoft shared its financial results for FY24 Q2 on Tuesday, revealing the company's sales data through Dec. 31, 2023. According to the earnings, gaming revenue is up 49% year-over-year, beating expectations. Xbox content and services revenue is up 61% year-over-year, with Xbox hardware revenue up 3% year-over-year.

This growth is largely due to the impact of Microsoft acquiring Activision Blizzard, a deal that was finalized back on Oct. 13, 2023. This is the first earnings report that integrates Activision Blizzard revenue alongside the rest of the Xbox division, with Activision Blizzard estimated to make 55 points of the 61% growth in Xbox content and services revenue.

Microsoft as a whole saw $62 billion in revenue, up 18% year-over-year with net income of $21.9 billion.

The prior quarter, FY24 Q1, saw Microsoft's gaming division beat expectations thanks to growth in first-party content and Xbox Game Pass.

Xbox saw huge growth, Activision Blizzard has seen large cuts

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While the Xbox division is seeing this big leap, it comes as 1,900 jobs are being cut, almost entirely from Activision Blizzard. In particular, Blizzard Entertainment and a number of studios were hard-hit, with Blizzard's unannounced survival game cancelled and the team working on it being laid off.

Microsoft is hardly alone in laying off a large number of employees, with the gaming industry seeing sweeping cuts over the last year at companies like Riot Games and Sony-owned Bungie. In particular, Embracer Group appears to implode further every week, closing studios like Volition and laying off chunks of staff at other teams like Tiny Tina's Wonderlands support studio Lost Boys Interactive.

Analysis: Soaring numbers, but what's next?

I know everyone will be fixated on the large leap in revenue due to Activision Blizzard, but the increase in hardware is equally interesting to me. Growth is nice, considering that there were massive holiday discounts on the Xbox Series X for Black Friday and the following weeks. We already knew Microsoft set a record for Xbox Series X|S consoles sold in December 2023, but it's still intriguing.

This kind of growth means the role of gaming at Microsoft is more iron-clad than ever before, with gaming taking over Windows as one of the most important pillars of the company. That's great to see, but it also raises serious questions about the necessity of last week's brutal layoffs. I hope we've seen the last of it and that every part of Xbox (as well as the rest of the gaming industry) can grow and expand at a sustainable pace, but my thoughts will remain with the affected employees.