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Microsoft has announced earnings results for the first time since closing its deal to acquire Activision Blizzard in October 2023. As expected, Microsoft’s gaming revenue surged dramatically thanks to the addition of Activision Blizzard. The announcement of these results comes just days after Microsoft became a trillion-dollar company and then laid off 1,900 people within the Xbox division.
Xbox content and services revenue surged by 61%, and this includes Xbox Game Pass as well as Activision Blizzard revenue. In total, gaming revenue at Microsoft came to $7.11 billion, up substantially from $5.26 billion year-over-year.
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Microsoft said the “net impact” from its Activision Blizzard deal was $2.08 billion in revenue. The company also noted that total costs of the buyout, beyond the purchase price, came to $930 million. Combined with other operating expenses of $1.59 billion, the net impact of the Activision Blizzard buyout during the quarter was an operating loss of $440 million.
Xbox hardware revenue, meanwhile, rose by 3% during the holiday quarter. As many will recall, Microsoft offered some nice discounts on Xbox products during the holidays, but CFO Amy Hood said the console market was “weaker than expected,” according to The Verge.
Also of note is that gaming is now Microsoft’s third-largest business category. Its $7.11 billion in revenue was third only to Office and cloud services ($13.47 billion) and server products and services ($23.95 billion). Gaming is, however, ahead of the Windows division ($5.26 billion).
Microsoft’s filing also reveals that the company paid $75.4 billion to acquire Activision Blizzard. That’s larger than the $68.7 billion figure that Microsoft originally disclosed.
Looking at Microsoft overall, the company brought in $62 billion in revenue over the past three months and posted a profit of $21.9 billion.
