During the financial conference call for the third quarter of the fiscal year 2025, Microsoft Chief Executive Officer Satya Nadella and Chief Financial Officer Amy Hood provided more color about the performance of the company’s Xbox gaming business.
During the livestreamed conference, Nadella mentioned that Microsoft is continuing to focus on expanding its profit margins by releasing its games across different platforms.
He also boasted that Microsoft ended the quarter (between January and March 2025) as the top publisher by pre-orders and pre-installs across the Xbox ecosystem and the PlayStation Store.
“We continue to transform the business and focus on margin expansion as we bring our games to over 500 million monthly active users across devices. We ended the quarter as the top publisher by pre-orders and pre-installs on both Xbox and PlayStation Store.”
We also hear that revenue for PC Game Pass grew over 45% compared to last year, and Xbox Cloud Gaming surpassed 150 million hours played during the quarter, which is a first for the service.
“PC Game Pass revenue increased over 45% year-over-year, with Xbox Play Anywhere players now can access more than a thousand games they can play across console and PC. And just last week, we brought cloud gaming to LG TVs. Cloud Gaming set a new record, surpassing 150 million hours played for the first time this quarter.”
Nadella also mentioned Microsoft’s forays in generative AI applied to gaming, including Copilot and Muse.
“We’re also integrating AI across the Xbox. The new Co-Pilot for gaming is a personalized gaming companion that provides in-game assistance and expert coaching, and our first-of-its-kind Muse model can generate gameplay in real time.”
Lastly, Nadella highlighted the commercial success of the Minecraft live-action movie and the positive effect it had on the game itself, which saw growth in weekly active users of over 75%.
“Finally, it’s fantastic to see the success of the Minecraft movie, which is the top-grossing film of the year. In addition to monetizing our IP in new ways, we have seen a 75-plus increase in weekly active users of the game year-over-year, since the release.”
As usual, Amy Hood provided the forecast for the gaming business in the current quarter, mentioning that Microsoft expects revenue growth for the overall business in the mid-single digits.
She also mentioned that revenue for the Xbox Content and Services segment is expected to grow in the high single digits, driven by first-party content. This time around, she did not provide guidance for Xbox hardware.
Xbox hardware revenue has been dropping for quite a while, so it’s not so surprising that a forecast wasn’t provided. Considering the guidance provided for the overall gaming business and that for the Content and Services segment, we can obviously extrapolate that Microsoft (unsurprisingly) expects further hardware revenue decline for the quarter.
If you want to know more about Microsoft’s financial performance, you can check out our article dedicated to the financial results announced earlier today.
