MS Q2 2024 Fiscal: Xbox content up 61%, Game Revenue up 49%, Xbox Hardware up 3%

https://www.theverge.com/2024/1/30/24055445/microsoft-q2-2024-earnings-revenue-profits-windows-xbox-gaming-surface

Microsoft just posted the second quarter of its 2024 fiscal financial results. The software maker made $62 billion in revenue and a net income of $21.9 billion during Q2. Revenue is up 18 percent, and net income has increased by 33 percent.

This is the first quarter Microsoft is reporting earnings as a $3 trillion company and also the first time the company has reported additional revenue from its Activision Blizzard acquisition. While Office and cloud revenue remain strong, devices revenue from Surface sales has continued to decline this quarter, with Windows bouncing back after a slow period for the PC market.

Xbox content and services revenue, which includes Xbox Game Pass, is up by a massive 61 percent. That’s largely because of the Activision Blizzard revenues, so it’s difficult to understand immediately how Xbox did without this giant addition.

Xbox hardware is also up by 3 percent, after the all-important holiday quarter. Microsoft ran a number of Xbox Series X promotions during the holidays in the US, but that doesn’t appear to have resulted in a big boost in sales and revenue. Overall Microsoft gaming revenue is up 49 percent, mainly boosted by Activision Blizzard revenues.

What say you fellow SW friends? Are you surprised by these drastic increases in Xbox revenue? Feel free to chime in!

Not surprised. They're including Activision which was already making billions in revenue. Let's see if they can maintain it under their leadership.

I can see them hitting $4 Trillion in 2025 with this acquistion.

In valuation? Nah I don't think so. Their hardware numbers went up slightly but not where they need to be to capitalize on the Activision content. They'll still need to rely on PC/PS and soon Nintendo to grow enough to justify that valuation.

I wonder if they worked in the cost of Activision in their earning in this report.

Doesn't take long for the pessimists to turn up in positive Xbox threads now does it 🤣

For me, I'm not interested in how much money they're making, I'm interested in the games they're making.

Waiting for the tidal wave of anger rushing this way, filled with corporate loyalists who hate when another company does well...

The biggest surprise is hardware being up by 3%.

---

Without ABK:

Gaming overall: +5%

Content and services: +6%

HW: +3%

More context:

@Nonstop-Madness: 🤫🤫🤫 Folks here don’t wanna hear any of that. Mid single digit growth in a holiday quarter… 😬

And Activision would be down almost 10% yoy if they were still on their own. Making the cuts make more sense. But add together Xbox’s meh Q4 where they saw STEEP hardware discounts, and a bad year for Activision together and Lems are messing their pants. Proving they don’t critically analyze anything. Just see what they wanna see.

More staff and studio cuts are coming. This ABK deal couldn’t have come at a worse time…

They don’t need to. They just moved one asset (cash short term asset) to another asset (ABK purchase long term asset).

How many on this forum care about the financial side of the gaming industry? Financial reports are irrelevant to us unless we are investors of the companies involved. Games, especially games that interest us, are more important.

They are triggered as ****.

Great news here:

Chin up cows,you may be in last place but you still got those console..

@onesiphorus: I already know this. The point is that whenever there is positive news for Xbox cows be upset and try to downplay it.

Your comment should be directed to cows, as sales is the number 1 go to for them. That is not opinion that is fact.

"How many on this forum care about the financial side of the gaming"

Every Cow on SW!

Like you? :P

@onesiphorus: You are correct. Feel free to share that with the revenue warriors.

One day some of you “gamers” are gonna realize these things go hand in hand. Investments are only made if big returns occur. Investors are better off putting their money in banks right now than they are investing in video games. ‘24 and ‘25 are gonna be brutal.

Considering it was just me and Kvally in the thread at the time this comment is aimed at me. What's pessimistic about my posts?

And now revenue is barely up even though Series X was available and heavily discounted.

That is dire.

To be flat with that despite a heavy hardware subsidy is dire.

+3% hardware despite all the fire sales seems OK?

@ghostofgolden: Why are you responding to me by putting quotation marks before and after the word gamers?

I am a gamer, as I only care about games, not how their made, or any of the financials behind them. That is a real gamer.

You on the other hand are not a gamer, because you want to know all about the financials of a company. Maybe learn how to use the quotation system properly next time.

To put it in lamens terms, gamers care about games, cows care about sales. So you really need to figure out which one you want to be.

@saint-george said:

@loudheadphones said:

@Nonstop-Madness said:

The biggest surprise is hardware being up by 3%.

---

Without ABK:

Gaming overall: +5%

Content and services: +6%

HW: +3%

More context:

@ghostofgolden said:

@Nonstop-Madness: 🤫🤫🤫 Folks here don’t wanna hear any of that. Mid single digit growth in a holiday quarter… 😬

And Activision would be down almost 10% yoy if they were still on their own. Making the cuts make more sense. But add together Xbox’s meh Q4 where they saw STEEP hardware discounts, and a bad year for Activision together and Lems are messing their pants. Proving they don’t critically analyze anything. Just see what they wanna see.

More staff and studio cuts are coming. This ABK deal couldn’t have come at a worse time…

And now revenue is barely up even though Series X was available and heavily discounted.

That is dire.

To be flat with that despite a heavy hardware subsidy is dire.

+3% hardware despite all the fire sales seems OK?

Yes, you would need it soon. A lots of it

@Zero_epyon: Yes ny post was partially about you but the incoming cow stampede too.

Oh geez dude I don't know, maybe the "let's see if they can maintain it under their leadership" part. Nah that's not being pessimistic at all 🤣

Yep. 3% is very dire

Definitely looks like they’ll be exiting gaming in 2027. 😅

Only 3% hardware increase after the buyout of Activison? Wow this horrible news, especially if any Xbox fan is celebrating a 3 % only increase in hardware sales .

It's not. Did they not just buy them and become Activision's new leader? I think you're reading too much into it.

They're not going to exit gaming. Phil's comments are about the Xbox. If their numbers don't improve by 2027 they'll exit the console business. Microsoft would continue putting games everywhere else as a third party and will continue pushing services with the content they make.

@Zero_epyon: I get it that you don't see it that way, but others perceive it differently to you.

@loudheadphones:

Microsoft also said hardware would be down YoY this quarter and that ABK will basically be providing all of their revenue growth during that timeframe as well.

Honestly, Xbox *really* needs ABK content on GamePass ASAP.

That's not something I can control so I guess it is what it is.

What they need is more Xbox users buying more future Activision games and services. Putting CoD on Gamepass will cannibalize those sales and bring in less revenue. It's also, in my opinion, not going to move the needle as much for Gamepass subscriptions. The reason I believe that is because Xbox is pretty much tapped for Gamepass and PC CoD players aren't going to give up playing with Steam so easily.

All signs are pointing to this.😏

I think its incredible that Hardware is somehow up even though it overall down in Europe where it is Xbox 2nd biggest market, indicating Xbox still somehow sold well in NA.

While GP is bleeding 500M+ a year, Activision and its mtx heavy trash titles are saving their sheets.😆

^Plex mad!!!!

@kvallyx: Good numbers. Does that include any ABK, or is that revenue not counted as "xbox" yet?

@ghostofgolden: MS is one of the top 3 wealthiest companies in the WORLD, and you're talking doom and gloom.

Priceless.

@Zero_epyon: Actually, it is something you can control. Imagine if you put hopefully instead of let's see if, you wouldn't sound so pessimistic that way now would you?

But I understand it's hard for you to be optimistic instead of pessimistic when it comes to Xbox/MS.

@last_lap: nah still sounds like a you problem.

Gaming, for Microsoft, is bigger than Windows.. let that sink in for a second... 'nuff said really..

again, i don't care about this financial stuff.. "revenue wars" was never a thing and that goalpost has certainly been abandoned now that Xbox is generating this kind of money..

what's important is that Xbox just had a Developer_Direct that was focused on several 1st party titles coming to Xbox this year.. and tomorrow it looks like PlayStation is having a State of Play focused on 3rd party content..

so judging by that, regardless of who's generating more revenue, which company is investing more into bringing 1st party games to their customers?.. 🤔

@Zero_epyon: Thank you for further proving my point that when it's MS/Xbox it's easier for you to be pessimistic than optimistic.

It's definitely a you problem Zero because you post this way all the time.

@last_lap: you're talking to the guy who actually beleives that Xbox is still leaving the hardware business before the end of this generation.. an Xbox division that's clearly focused on expanding to as many gaming screens as possible.. yet they are going to do the opposite and completely leave one of the largest gaming markets in the world..

that's the guy you're talking to.. that's the level of delusion..

yet, he pretends to be confused when you say his comments are usually pessimistic when it comes to Xbox.. 🙄

@Antwan3K: Oh I know all about Zero and his predictions. I cottoned on to Zero a long time before anyone else here did lol.

The guy just doesn't like Xbox and that's fine, but to pretend that you're trying to be impartial like he does is just silly, and he genuinely believes that he is lol.

@last_lap: yeah, i'm very aware of the "unbiased gamer" schtick.. that ship sailed a long time ago..

@Antwan3K: Yeah that ship sailed and sunk well before the Titanic did 🤣

Not the greatest growth without AB, but nice and steady. As for them exiting consoles, that might be true, but I don't see it. The console sales are down because they really aren't providing people with a valuable reason to buy an Xbox. Think of it this way, all their games are on pc and their is literally no difference between playing their game on pc vs playing on Xbox. Actually, the experience is probably better on PC. Nintendo has their handheld / console gimmick plus exclusive games. Sony has....? Well Sony has the hype from the ps4 days, though the ps5 is complete trash. Sony also has the dual sense controller and the vr headset.

Xbox console is just a dressed up PC.