Redmond, Washington — Microsoft has reported robust growth in its quarterly earnings, fueled largely by its cloud services and gaming divisions. The technology giant revealed notable increases in its Xbox segment during a recent earnings call, led by a 6% rise in software and services year-over-year.
CEO Satya Nadella highlighted that Xbox content and services surged by 8%, marking the strongest third quarter in the company’s gaming history. The impressive performance can be attributed to a variety of factors, including the popular Game Pass subscription model, blockbuster titles like Call of Duty, and the enduring appeal of Minecraft. In fact, Minecraft has enjoyed a staggering 75% increase in weekly average users, significantly bolstered by the recent success of the Minecraft movie.
Despite a 6% decline in Xbox hardware sales, Microsoft noted signs of stabilization in this area. Meanwhile, the PC Game Pass service saw an extraordinary year-over-year growth of 45%, highlighting its competitive edge against platforms like Steam. Additionally, Microsoft has emerged as the leading game publisher on PlayStation in terms of preorders and preinstallations, thanks to franchises such as Indiana Jones, Forza Horizon 5, and DOOM: The Dark Ages.
The company revealed that Xbox Cloud Gaming has achieved its highest usage levels to date, with 150 million hours streamed over the past quarter—an increase of 10 million hours from the previous quarter. This growth counters recent analyst claims that Xbox Game Pass growth had plateaued, particularly as focus tends to lean toward U.S. markets. Reports suggest that Xbox Cloud Gaming has become more prominent than both console and PC gaming in some regions, particularly in countries like Brazil, where high import taxes discourage hardware purchases.
Looking ahead, Microsoft is poised to maintain its momentum with upcoming releases such as DOOM: The Dark Ages and Elder Scrolls IV: Oblivion. These titles are expected to boost subscriptions as the company gears up for its Xbox Showcase 2025 on June 8. This event aims to unveil future games for both PC and Xbox consoles, alongside plans for PlayStation.
Moreover, Microsoft sees potential with the anticipated Nintendo Switch 2, which may enhance Nintendo’s hardware capabilities and bring it closer in performance to platforms like the Xbox Series S and Steam Deck. The evolving landscape of gaming, characterized by innovative releases and platform partnerships, positions Microsoft to capitalize on increasing consumer demand.