Xbox grows in revenue from content and services in the fourth fiscal quarter of 2025

Microsoft celebrates a positive fiscal year close with a new boost for the Xbox division.

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Microsoft has presented its financial results for the fourth fiscal quarter of 2025, and the data makes it clear that Xbox’s content strategy is still paying off, even if hardware sales are not. According to the official report, Xbox content and services revenue has increased by 13% year-over-year, thanks largely to Game Pass subscriptions and the boost from proprietary games after the integration of Activision Blizzard.

This growth in the content area contrasts with a 22% decline in hardware revenue, suggesting that console sales continue to decline as the company’s multi-platform focus takes hold.

Xbox Grows in Content, but Sells Fewer Consoles

Among the most relevant data from the financial report, we find:

• Total gaming revenue: +10%

• Xbox content and services revenue: +13% (12% adjusted for currency)

• Xbox hardware revenue: -22%

Analysis

According to Microsoft, the growth is largely due to the “strong performance of proprietary games and Xbox Game Pass,” as well as the positive impact of the Activision Blizzard acquisition. In annual figures, the Xbox division has generated $23.455 billion in fiscal year 2025, compared to $21.503 billion the previous year.

Despite this improvement in revenue, the context is complex: over 9,000 employees were recently laid off, and some of those cuts affected the video game division. However, the company remains committed to expanding Xbox through new digital stores, devices, and multi-platform services.

All this while we see several Xbox games appearing among the best-selling games on PlayStation in the US, reflecting the new business model that Microsoft is consolidating. Hardware is no longer the core, but content. And the numbers are starting to back up that idea.