Microsoft’s financial report shows that game sales are up big, thanks to the Fallout TV series and Activision Blizzard, but Xbox hardware sales are also down.
When Xbox President Sarah Bond said in February 2024, “Every screen is an Xbox” to employees, it showed what their immediate focus was for the future, and as Microsoft released their financial results for Q4, their shift in strategy was immediately reflected. While Xbox software sales are up a considerable amount, Xbox hardware sales have fallen at nearly the same rate.
Microsoft’s CEO, Satya Nadella, tags the Fallout TV series as one of the reasons Xbox software sales have increased, claiming that “hours played on Game Pass for the Fallout franchise increased nearly 5x quarter-over-quarter” since the release of the series. SteamChartz provides data that is consistent with Microsoft CEO Nadella’s statement, as when the series launched in April 2024, Fallout 4‘s player base increased by nearly 300% on just Steam, while Fallout 76‘s increased by a whopping 331% in the same month.
According to the Q4 2024 financial results, “Xbox content and services revenue increased 61%, driven by 58 points of net impact from the Activision acquisition”. This is in addition to the overall 44% increase in software sales Xbox reported during the quarter, but the overall 42% decrease in hardware sales could be a victim of Xbox continuing to push Xbox Game Pass as a service away from Xbox. Amazon Fire TVs (and other devices) can now use Xbox Game Pass and are not considered Xbox hardware.
CEO Nadella also claimed during the call, that Microsoft’s gaming division has over 500 million monthly active users. He said “We previewed a record 30 new titles at our showcase this quarter. 18 of them, such as Call of Duty: Black Ops 6, will be available on Game Pass” with “Our pipeline has never been stronger”.
