Xbox Q2 FY25 gaming revenue is down 7% year-over-year, but Xbox Game Pass still grew

[Windows Central]

Microsoft financial results are in, with Xbox Q2 2025 gaming revenue down 7%, while Xbox Game Pass saw growth.

Xbox Q2 FY25 gaming revenue is down 7% year-over-year, but Xbox Game Pass still grew : Read more

 

[Lurking_Lurker_Lurks]

I think (not a financial analyst) what we're seeing is Microsoft Gaming settle into its new size post ABK aquistion. This isn't going to be as big as Xbox + ABK, and Microsoft now has the hard job of proving why the ABK purchase was an INVESTMENT and not just a one off boost. Additionally, I'd say we're seeing the reality that ABK's executives and shareholders wouldn't approach Microsoft to be purchased (or have even taken any offers remotely seriously) had they seen infinite growth on the horizon. Again, Microsoft will have the difficult job of proving ABK to be a worthile investment when the reality is that even the company's former leadership saw a ship that had reached its peak.

 

[fatpunkslim]

Do not confuse revenue and profit, they are not the same thing at all.

Game Pass has set a new quarterly record growing its PC subscriber base by over 30%.

Gross margin increased $1.9 billion or 15% driven by growth in Gaming, including the impact of the Activision Blizzard acquisition. Gross margin percentage increased driven by sales mix shift to higher margin businesses and improvement in Search and news advertising and Gaming

Content and services revenue is up 2% and Hardware sales were also down a significant margin by 29%. But the profit margins on consoles are almost zero, it's almost he same for PS. The profit margin on content and services is much higher. Note that console sales are down everywhere, not just for Xbox.

Moreover, Xbox is the top publisher ahead of EA, Ubisoft, and Take-Two.

So all this shows that Xbox is doing very, very well.