Activision Blizzard boosts Microsoft earnings, but Xbox console sales plummet
Not even Starfield could drive hardware.
Microsoft's acquisition of Activision Blizzard has contributed to a boost in gaming revenue, but Xbox console sales have taken another massive hit.
In its latest earnings report, Microsoft stated gaming revenue has increased by $1.8bn, or 51 percent year-on-year, while Xbox content and services revenue specifically increased by 62 percent. Microsoft admits this is due to the net impact from the acquisition of Activision Blizzard.
Hardware revenue, however, has decreased by 31 percent year-on-year due to poor sales of Xbox consoles. Even the release of major exclusive Starfield last year couldn't improve hardware sales.
It's a similar story to this time last year, when the company also reported a 30 percent drop in hardware revenue.
There's also no mention of Game Pass subscriber numbers in this latest report.
Back in March, Microsoft Gaming boss Phil Spencer shared his concern about the "lack of growth" in the industry, which was a key reason for the mass layoffs at the company earlier this year.
Now we have the numbers to back up that lack of growth, and a key reason for Microsoft now publishing games on rival platform PlayStation, including Sea of Thieves and Grounded.
"We're expanding our games to new platforms, bringing four of our fan favourites to Nintendo Switch and Sony PlayStation for the first time," said Microsoft CEO Satya Nadella during the earnings call (thanks The Verge). "In fact, earlier this month we had seven games among the top 25 on the PlayStation Store, more than any other publisher."
The Activision Blizzard acquisition also impacted operating income, which increased by 16 percent for Microsoft overall. Operating expenses increased $1.3bn (41 percent) due to growth from Activision Blizzard.
Microsoft's drawn out acquisition of Activision Blizzard was finally completed in October last year, with the $68.7bn purchase being the biggest in video games industry history. Now, in this latest financial report, we're seeing the impact.