Microsoft Corporation (NASDAQ:MSFT) saw revenues from Xbox content and services rise 12% in the first quarter of 2024, a trading update revealed.
Jumping more than all other categories, apart from its software offerings which include cloud services and Office 365, Microsoft confirmed much of this growth was propped up by an 8% jump in gaming revenues.
Xbox hardware revenues slipped by 8% year-on-year, while sales from devices fell by 22%, offset by a 12% jump in content and services revenues.
It indicates that while its Xbox Game Pass subscription continues to experience growth, areas like console sales have flagged.
'Starfield', a game launched by Microsoft owned-Bethesda last month, helped maintain “better-than-expected subscriber growth in Xbox Game Pass”, according to the tech giant’s chief financial officer Amy Hood.
Having not been made available on PlayStation, 'Starfield' was added directly to Game Pass upon its launch and can be played via Xbox’s cloud gaming, echoing warnings from Sony concerning the Activision acquisition.
Sony, the owner of PlayStation, has been very outspoken about Microsoft acquiring the 'Call of Duty' owner, warning it could lead to IPs ending up exclusively on Xbox, which it believes would rapidly reduce the competition in the industry – and is the reason why UK and US regulators launched investigations into the deal.
Gaming revenues are set to boom for the company now the Activision merger is completed. It expects revenue growth in the mid-to-high 40s, including roughly 35 points of net impact from the Activision acquisition,
“We expect Xbox content and services revenue growth in the mid to high 50s, driven by roughly 50 points of net impact from the Activision acquisition,” Hood added.
Microsoft shares are up close to 4% in pre-market trading in the US, having closed at more than US$330.