Microsoft announces Q1 2025 earnings result: Activision bet pays off as Xbox hardware sales decline

Microsoft has announced its Q1 2025 earnings result. The biggest highlight in the tech giant’s report was a significant increase in gaming revenue, driven by strong growth in Xbox content and services. However, the company noted that its Xbox hardware revenue continues to decline. The latest earnings report shows a 61% year-over-year increase in Xbox content and services revenue which the company largely attributed to the acquisition of Activision Blizzard. Meanwhile, Microsoft also reported a 29% decline in Xbox hardware revenue. The company’s strategy of making its games available on multiple platforms, including PC and cloud gaming, may have contributed to the decline in its hardware sales. Apart from this, Microsoft also reported an increase in AI cloud services, OEM and device revenue.