Xbox FY24 Q3 gaming revenue up 51% year-over-year thanks to the Activision Blizzard acquisition

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(Image credit: Microsoft)

What you need to know

  • Microsoft shared its financial results for FY24 Q3, the quarter ending on March 31, 2024. 
  • Gaming revenue was up 51%, with growth coming from the addition of Activision Blizzard revenue compared to 2023. 
  • Xbox content and services revenue is up 62% year-over-year. 
  • Xbox hardware revenue is down 31% year-over-year.

The latest gaming earnings are in, with details that again factor in the biggest acquisition the gaming industry has ever seen. 

Microsoft shared its financial results for FY24 Q3 on Thursday, giving an overview of the company's money-making businesses across numerous sectors. For Xbox, gaming revenue was up 51% year-over-year, a monumental increase that is due to the addition of Activision Blizzard compared to the same period in 2023. Xbox content and services revenue is up 62% year-over-year, while hardware revenue declined by 31%. 

Overall, Microsoft saw $61.9 billion in revenue for the quarter, beating expectations. 

How has Activision Blizzard boosted Xbox revenue?

Microsoft officially acquired Activision Blizzard on Oct. 13, 2023, almost two years after the deal was first announced in January 2022. Since then, and starting with FY24 Q2, Microsoft's financial results have included Activision Blizzard revenue as part of Xbox, meaning the baseline for the entire division has risen dramatically, which leads to the massive year-over-year increases, as quarters with Activision Blizzard revenue are being compared to quarters in 2023 where that revenue was not included. 

While Microsoft is still integrating Activision Blizzard (and King) into its first-party studios, the acquisition has begun to bear fruit for players, with Diablo 4 added into Xbox Game Pass. Microsoft Gaming CEO Phil Spencer has also noted that players can expect to see other Activision Blizzard games added into the service in the future, including the Call of Duty franchise.

Speaking on the conference call accompanying the earnings, CEO Satya Nadella noted that Xbox Game Pass subscribers played over 10 million hours of Diablo 4 after it was added to the service, making it one of the largest first-party launches in the service yet.

Looking ahead to FY24 Q4, Microsoft expects growth in the mid-40s range year-over-year for gaming revenue, driven again by the acquisition of Activision Blizzard. Xbox hardware is again expected to be down year-over-year.

Analysis: A strong baseline

As was expected, the addition of Activision Blizzard has raised the rising tide of revenue for the Xbox division. Those ludicrous year-over-year percentage increases will disappear into 2025 and beyond, but for now, they're fun to observe. 

It'll be interesting to see these quarters when Microsoft again has some major first-party game launches, as the first couple of months of 2024 have been light so far. That's looking to change later in the year with the arrival of some big games, including Obsidian Entertainment's Avowed, MachineGames' Indiana Jones and the Great Circle, and the next Call of Duty, with development on the latter widely reported to be led by Treyarch.

Looking ahead, I'll also be curious to see if the Fallout resurgence gets a mention, as Bethesda Game Studios' post-apocalyptic franchise exploded in April thanks to the launch of the Fallout TV series on Prime Video.

Samuel Tolbert
Freelance Writer

Samuel Tolbert is a freelance writer covering gaming news, previews, reviews, interviews and different aspects of the gaming industry, specifically focusing on Xbox and PC gaming on Windows Central. You can find him on Twitter @SamuelTolbert.