Xbox Hardware Takes a Hit, But Game Pass Shines: Microsoft's Q4 2025 Gaming Revenue Up by 10%
Microsoft has just released its financial report for the fourth quarter of the 2025 fiscal year, and the gaming division has some impressive numbers to share. Despite a 22% drop in Xbox hardware revenue, the overall gaming revenue managed to grow by 10%. This growth was largely driven by a 13% increase in Xbox content and services revenue, which offset the decline in hardware sales.
During the earnings call, Microsoft's CFO Amy Hood highlighted that the strong performance was primarily due to the exceptional contributions from first-party content and Xbox Game Pass. In fact, Xbox Game Pass has reached a significant milestone, with its annual revenue nearing $5 billion for the first time since its launch in 2017.
Microsoft CEO Satya Nadella also shared some remarkable achievements. Microsoft has become the top publisher on both Xbox and PlayStation platforms, thanks to the success of games like "Forza Horizon 5" and "The Elder Scrolls: Oblivion Remastered." Additionally, Microsoft's gaming ecosystem saw an impressive 500 million monthly active users across all platforms and devices.
Other notable highlights include:
- Over 500 million hours of gameplay streamed through cloud gaming this fiscal year.
- "Call of Duty: Black Ops 6" attracted 50 million players and accumulated over 2 billion hours of gameplay.
- "Minecraft" achieved record-high monthly active users and revenue, partly due to the success of the "Minecraft" movie.
Looking ahead, Microsoft has nearly 40 games in development, which is an exciting prospect for gamers. However, CFO Amy Hood expressed caution for the first quarter of the next fiscal year, predicting a mid-to-high single-digit decline in gaming revenue due to high base effects from the previous year.
