Despite hardware decline, Xbox reports record Q3 thanks to Activision boost

Activision Blizzard helped drive Microsoft’s gaming division to a record third quarter, despite a significant decline in Xbox hardware sales.

For the three months ended March 31, 2024, gaming revenue was up 51% year-over-year, including 55 points of net impact from Activision, to a record $5.45 billion.

Xbox content and services revenue rose 62%, driven by 61 points of net impact from Activision, but Xbox hardware revenue declined 31% year-over-year.

Microsoft completed its acquisition of Activision Blizzard in October 2023, taking ownership of franchises including Call of Duty, World of Warcraft, Diablo and Overwatch, and the deal had a similarly positive impact on the Xbox maker’s financial results during that quarter too.

During Microsoft’s earnings call on Thursday, CEO Satya Nadella highlighted the impact of Activision Blizzard games, which helped the company “set third quarter records for game streaming hours, console usage, and monthly active devices”.

Diablo 4 became the first Activision Blizzard game to be added to Microsoft’s Game Pass subscription service on March 28.

According to Nadella, members played over 10 million hours within the first 10 days, “making it one of our biggest first party Game Pass launches ever”.

He continued: “We’ve also been encouraged by the ongoing success of Call of Duty’s Modern Warfare 3, which is attracting new gamers and retaining franchise loyalists.”

Nadella also suggested that Xbox is starting to reap the rewards of its increased multiplatform focus, noting that at one point this month, it had seven games among the top 25 sellers on the PlayStation Store, which was “more than any other publisher”.

Microsoft is reportedly planning to unveil new Call of Duty and Gears of War games at its Xbox summer showcase in June.