Activision Increases Microsoft's Q3 Game Revenue, But Actual Xbox Sales Continue to Drop
Microsoft's results for Q3 2024, which covered the period from the beginning of January to the end of March, are now available, and they dramatically highlight two stories that are developing for Team Green. On the one hand, Microsoft's gaming revenue has increased dramatically overall as a result of Activision Blizzard's acquisition; but, the Xbox business as a whole has not improved, with console sales falling precipitously year over year.
Revenue from Microsoft Games climbed 51% overall compared to Q3 2023, with Acti-Blizz games accounting for 55% of the growth. Put another way, if it weren't for the delicious Call of Duty money that is currently rolling in, the gaming industry would actually be down 4%. Activision accounted for sixty-one percent of the 62 percent increase in Xbox content and services income.
Microsoft anticipates more losses in Xbox Series X/S sales next quarter, which were down 31% year over year. It should be mentioned that Xbox sales have been down for a while; in fact, they fell by 30% in the third quarter of last year as well. If one wants to observe any true growth in Xbox sales, they must go back to early to mid-2022. This appears to be in line with recent retailer allegations that Xbox sales are "flatlining," to the extent that some publishers are beginning to doubt the time and cost involved in porting titles to the Xbox Series X/S.
As I've mentioned previously, it appears that Microsoft is at a turning point in the gaming industry. Although they are currently among the largest and maybe most successful third-party publishers in the industry, their first-party Xbox business still appears to be failing. Some of Microsoft's previous exclusives have already begun to appear on other platforms, and I have a feeling that more will follow. Microsoft always looks out for its own interests, and these days, that means looking out for third parties.
Satya Nadella, the CEO of Microsoft, gave the impression on
the company's Q3 results call that the company was devoted to branching out
into new markets. He boasted about releasing seven of the top 25 titles on
PlayStation this month and added that they would "meet players where they
are."
"By making fantastic games available to more people on more devices, we
are dedicated to reaching gamers where they are. In terms of monthly active
devices, console usage, and game streaming hours, we broke Q3 records."