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Xbox Game Pass generates nearly US$5 billion in annual revenue, says Microsoft

Xbox Game Pass generates nearly US$5 billion in annual revenue as Microsoft reports record growth in gaming content and services.

Microsoft has announced that Xbox Game Pass reached almost US$5 billion in revenue over the past 12 months, marking a new milestone for the popular subscription gaming service. The figure was disclosed in the company’s fiscal year 2025 Q4 earnings report, which covered the period ending 30 June 2025.

Chief Executive Officer Satya Nadella shared the results during an investor call, highlighting the company’s broad success across gaming platforms. “We are now the top publisher on both Xbox and PlayStation this quarter,” Nadella said. “Game Pass annual revenue was nearly US$5 billion for the first time.”

Growth across Xbox content and services

Xbox gaming revenue rose by 10% compared to the same period last year. Meanwhile, revenue from Xbox content and services—which includes Xbox Game Pass as well as first-party titles—saw a 13% increase during the final quarter. This growth suggests that Microsoft’s strategy of expanding its games to additional platforms is bearing fruit.

Part of the recent revenue surge is believed to be driven by Microsoft’s decision to release formerly Xbox-exclusive games on other consoles. Notably, titles such as Indiana Jones and the Great Circle and Forza Horizon 5 became available on PlayStation 5 in recent months. This cross-platform approach appears to have boosted both digital sales and subscriptions.

Despite the financial success, Microsoft did not provide updated Game Pass subscriber numbers in this earnings report. The last official count, shared in February 2024, stated that the service had 34 million members. Without new data, it remains unclear whether that figure has since risen or declined.

Decline in hardware revenue amid price increases

While software and services continue to perform strongly, Xbox hardware revenue took a hit, declining by 22% in the latest quarter. This drop may be linked to Microsoft’s decision earlier this year to raise prices on its Xbox Series X and Series S consoles, as well as related accessories.

In addition to hardware pricing adjustments, the company also announced in May that some upcoming first-party games would carry a new US$80 price tag, aligning them with expected pricing for Nintendo’s upcoming Switch 2 titles. However, Microsoft has already shown some flexibility on this plan. The price of two major titles—The Outer Worlds 2 and Borderlands 4—was subsequently reduced, indicating that pricing strategies may continue to evolve based on consumer response and market conditions.

Gaming audience continues to expand

Beyond revenues, Microsoft also reported that it now has 500 million monthly active users across its various gaming platforms and services. This includes players on Xbox consoles, Windows PCs, and other supported devices. The growing user base reflects the company’s expanding footprint in the global gaming market, as it increasingly embraces a platform-agnostic approach.

As Microsoft continues to invest in content and accessibility, the strong performance of Xbox Game Pass underscores the importance of subscription models in the modern gaming landscape. However, with hardware sales dipping and price hikes stirring debate among gamers, the company may need to strike a careful balance to sustain its current momentum.

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