340°

Microsoft Gaming Revenue Grows 5% Year-on-Year, Content and Services Up 8%, Xbox Hardware Down 6%

Microsoft announced its financial results for Q3 of fiscal year 2025, including an update on its gaming business.

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simulationdaily.com
2d ago Replies(1)
darthv722d ago

To put it simply... two steps forward, one step back.

Abriael2d ago (Edited 2d ago )

That's not how that works.

Gaming revenue is already a balance of Content and Services +/- Hardware. So it's simply one step forward. Microsoft's gaming business is growing, and has been growing pretty much forever.

darthv722d ago

...two steps forward and one step back still amounts to one step forward, does it not?

Abriael2d ago (Edited 2d ago )

@darthv72: But in this case, it's more one step forward that would be pretty large, but is held back by some weight, so it's instead a bit smaller, but it's still a sizable step forward, since hardware weighs a lot less than content and services. Your comparison would work if C&S and Hardware were equivalent.

anast1d 14h ago

Revenue is not profit. So, we don't know if they have actually been growing or playing catch up.

Darth is correct by the way.

rlow11d 4h ago

I imagine we would have to know the profit they make off of each category. To be able to access how much of an impact the negative console sales have on the whole. If they barely squeak a profit out of hardware or better yet, are in the negative for each sold. It won’t impact the other categories as much. Considering the bulk of the profits come from software. But just my take.

tay87011d 2h ago

Care to reassess your statement? Xbox is officially dead in the water now, console wise. No one was buying it before and they damn well wont be doing so going forward. They just raised the cost on their controllers, consoles, and pushed the price to $80 on games. Gamepass will be soon be seeing another price hike as well, book it.

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Christopher2d ago

Really depends on your goal. I was told by Microsoft that they were still pushing hardware, so I don't know what to believe.

StormSnooper1d 14h ago

One step forward toward becoming a 3rd party publisher. But yes one step forward.

TheColbertinator2d ago

Another win for Microsoft. The haters can use the dog door to leave.

2d ago
DodoDojo1d 16h ago

And then Chris said: "Help me step brother"

Johnh52231d 21h ago (Edited 1d 21h ago )

They should drop the price of hardware permanently . Its been 5 years but have had price increases? Doesn't make since

MrNinosan1d 14h ago

And with that comment, you explain why you don't run a business or have any understanding of a business 👍

dveio2d ago (Edited 2d ago )

Hardware revenue will probably sit somewhere between 800M - 1B for the quarter.

And content & services make up around 75 - 80% of total gaming revenue. Total gaming revenue is up 5%.

While positive numbers are positive, I don't find +5% year-on-year in total revenue a great, not even a good result considering what they've been throwing into the pot since their last Q3.

I don't think they are happy with only a +5% payoff since and compared to last year's Q3, which was abysmal, despite these numbers are indicating "Positive!" at 1st glance.

Especially since in terms of revenue, hardware doesn't contribute a lot to overall revenue anymore ("only" -6% down, because there's no hardware really being sold anymore).

2d ago
dveio1d 20h ago

Edit:

"Hardware revenue will probably sit somewhere between 800M - 1B for the quarter."

Was too optimistic.

It's estimated to be at ~330M in Q3.

This means hardware revenue contributed ~6% to Xbox total gaming revenue.

Which then means that 94% of Xbox total gaming revenue in their Q3 '25 was driven by content & service.

And that big portion is up 8% compared to last year's Q3, dragged down by -6% hardware revenue, totalling +5% overall.

Is that really a good result for an up to now 94% "content & services segment", considering that, after last year's Q3, there were Call of Duty, Indiana Jones, Stalker 2, Flight Simulator & other 3rd parties being put D1 into GP?

And considering that subscriptions themselves also fall into content & services segment?

+5% is growth no matter what, sure. No denying.

But ... looking at what they've been throwing into their "content & services" playground since Q3 '24, I don't really see how +5%, while being growth, is a good result business-wise (ROI).

crazyCoconuts1d 13h ago

I'm thinking the same thing. This year is kinda like a sugar high for MS. Lots of great games coming out of the pipeline, plus relatively "free" revenue by cashing in on prior opportunity costs by putting prior exclusives on PS. This year, if any, should be gangbusters for them. I can't imagine next year being as good with all these studios back in the development phase...

dveio1d 12h ago

@crazy

Last Q3 '24, their overall revenue was up 61%. (Thanks to ABK.)

What's left?

5%. In 12 months.

After they increased GP for an average of +18% across all tiers.

After they put Call of Duty (!) D1 into GP.

5%.

That's crazy if you asked me.

dveio1d 20h ago

Missed that:

Because the actual question for them today is:

• Let's look at retail revenue we've lost from games being D1 in GP, e.g. Call of Duty (just to name the biggest one).

• And ask ourselves: would we've had gained more than +8% in content & services with the retail model?

Keep in mind there was a price increase of GP tiers which came effective in Sept. 2024.

And Sept. 2024 was, logically, after (!) their last Q3.

So - no, +5% in revenue (!) ain't good.

Lightning772d ago

Well what do you know. When you release good games, good consecutive 1st party you output you actually make money.

Minus hardware of course.

I'll give credit where it's due. MS is starting to capture that old 360 energy when it comes to games and releases. It took them 14 years of having a clue but they seem to be doing it now. All will be lost if they step on rakes like they're known to do. Who knows how long it'll last.

franwex1d 19h ago

It took them essentially going third party but still making hardware to capture that energy.

Knushwood Butt1d 19h ago

Revenue is revenue.
If by, 'make money', you mean profit, there's nothing here to show they made a penny of profit.

Scissorman1d 16h ago

I'd imagine profit margins are either razor thin or non-existent. But I also think this will change over time. The one thing I can't wrap my head around is Microsoft's desire to create a next-generation console. No one is interested. Last month Xbox sold an estimated 50K units outside of the US. A 6% drop may seem like a low percentage but it's a drop from already low starting point, signaling that interest in Xbox hardware is approaching rock bottom.

MrNinosan1d 14h ago

This report has nothing to do with MAKING money thou. It's revenue, not profit.

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70°

50 Best SNES Games of All Time

Cultured Vultures: You love the SNES, we love the SNES, so let’s look at the best SNES games ever together.

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culturedvultures.com
FTLmaster15h ago

Uniracers (aka Unirally in the UK) is a low-key classic SNES game

PRIMORDUS3h ago

I loved Actraiser, the music really showed what the SNES can do.

380°

Former Santa Monica Studio Writer Shares Insight On The Game Industry: “It’s Not Great”

Former Santa Monica Studio writer Alanah Pearce has shared some insight on the game industry, and it's not great.

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twistedvoxel.com
Goodguy011d 12h ago

AAA has gone downhill as they focus on huge profits. Indie and other smaller games however have been amazing not chasing trends and the next big thing.

Redemption-647h ago

In all honesty, a significant majority of indies and smaller games fail. At best a you might hear about 10-20 indies that get attention or do well, but 100s more fail. AAA games can still be the bread and butter of the industry, but greedy executives would kill a good game if it doesn't make them a lot of money

Ethereal10h ago

Nail on the head. AAA has lost the magic and focused on profits and "player engagement". Gaming is an art form, and like always the CEO fat cats roll in to capitalize at the cost of innovation, passion, wild experimentation. We need a major realignment in the industry and it starts with gamers voting with their wallets.

Killer2020UK7h ago(Edited 7h ago)

I think that's already happening, we're seeing commercial successes in studios like Larion and whoever made Kingdom Come for example. Double Fine is another good example. Studios who are filled with and run by people who give a fuck that aren't hamstrung by money men. That's the answer and consumers are favouring it more than the soulless AAAs that have been put out. I don't doubt there is talent at Ubisoft for example but when they're told exactly what the end product needs to be by people who don't know what consumers actually want, it's always going to result in the same rehashed but slightly shinier slop.

Ethereal7h ago

Exactly. I do believe we are starting to see a shift in consumer habits. The market is saturated with GaaS and battlepasses, seasons, etc. We can't all play the same four games until the end of time. Fatigue is setting in and the industry needs to get back to making new experiences rather than chasing the latest "money maker".

Killer2020UK7h ago

I was wondering whether this is perception or actually happening but it feels to me, as a semi old gamer, there is more choice than ever and as such people are now much choosier about how they spend their time and money gaming. Certainly noticing this when it comes to GaaS as you mentioned, the question always has to be why would I play this instead of what I'm already playing. Anthem is going to have a real hard time prying away people, especially with a premium price tag that screams money men as a decision.

Palitera2h ago(Edited 2h ago)

Nah. Devs need to pay the bills. Uninspired games fail, but artsy games usually fail even harder.

anast10h ago

She didn't even call out Stanfield's PNG file planets when she flew through one. She just 'yelled' something stupid like 'flat earth'. She wasn't even taken aback in the slightest. I am not sure she isn't a part of the problem.

Aloymetal8h ago

She's always been a narcissist bimbo, I'm even more surprised she's not in only fans yet.

8h ago
7h ago
anast7h ago

@Aloy ha!

@Lanx I'm sure you see where you are not making any sense.

Cellblock119h ago

"Former", wow she didn't last at SM Studios very long at all.

isarai9h ago

4yrs is pretty good not sure what ur talking about

Cellblock116h ago

I wasn't sure of the actual number of years just seemed like it wasn't that long ago when I heard that she got a job as a writer there, guess time flies. 4 years being "pretty good" or not is subjective depending on ones perspective. The question might be, was four years long enough to make a discernible writing contribution to a video game based on how long development cycles are these days?

QuantumMechanic8h ago

She left SMS because she needed to go back to Australia to support a parent with cancer.

Petebloodyonion2h ago

She quit SM studio to focus on her own stuff, There was a video where she explained all of it.

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Rainbowcookie9h ago

Greed , lack of innovation and agendas

Why do we rave about a good indie game but we avoid a AAA game.

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70°

NVIDIA Smooth Motion: Up to 70% More FPS Using Driver Level Frame Gen on RTX 50 GPUs

NVIDIA’s RTX 50 “Blackwell” architecture has been a bit of a bore for us gamers. Apart from Multi Frame Generation, which has limited use-case scenarios, there isn’t much to be excited about. It is achieved using GPU-side Flip Metering. The optical field data is generated using AI models in the Tensor cores.

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