Microsoft has disclosed its financial performance for the second quarter of the fiscal year 2024, revealing a significant boost in gaming revenue. With the acquisition of Activision Blizzard in October, the tech giant witnessed a remarkable 49% surge in gaming revenue, reaching $7.1 billion. This increase includes a 44-point net impact resulting from the Activision deal. Notably, Xbox content and services revenue experienced a substantial 61% growth, attributed to a 55-point net impact from Activision.
Despite recent reports suggesting the closure of departments responsible for bringing Xbox games to physical retail and massive layoffs at Activision Blizzard and Xbox, the financial results present a positive trend. Xbox hardware revenue also saw a moderate 3% year-over-year increase. The Activision Blizzard acquisition contributed $2.1 billion in revenue, accompanied by a $437 million operating loss, according to Microsoft.
Satya Nadella, CEO of Microsoft, highlighted the achievement of setting all-time records for monthly active users on Xbox, PC, and mobile platforms in the quarter. The company now boasts over 200 million monthly active users on mobile alone, including those engaged with Activision Blizzard games. Nadella emphasized the addition of hundreds of millions of gamers to their ecosystem, aligning with Microsoft’s goal to reach a broader audience across various platforms.
Nadella underscored the importance of great content for the company’s growth, noting a 44% YoY increase in hours streamed through cloud gaming. He expressed excitement about Microsoft’s compelling lineup of upcoming games, citing “Indiana Jones and the Great Circle” among them.
Looking ahead to the current quarter ending in March, Microsoft anticipates revenue growth “in the low 40s,” encompassing approximately 45 points of net impact from the Activision acquisition. Xbox revenue is projected to surge by about 50%, driven by approximately 50 points of net impact from the Activision acquisition. Concurrently, hardware revenue is expected to decline year-over-year.
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