Starfield and Game Pass drive record Q1 gaming revenues for Microsoft

gamesindustry.biz:

Microsoft has released the results for the first quarter of its financial year, showing a strong start for its gaming business thanks to the launch of Starfield and the inherent impact on Xbox Game Pass.

For the three months ended September 30, 2023, the company reported total revenues of $57 billion (up 13% year-on-year), including $13.7 billion (up 3%) from the More Personal Computing division, which includes Xbox.

Xbox content and services revenue rose 13% year-on-year, driven in part by the launch of Starfield, although hardware sales were down 7%.

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In its investor call around the results, Microsoft talked up the impact of Starfield on the growth of its Xbox division. More than 11 million people have played the game so far, with nearly half the hours played being on PC.

Chief financial officer Amy Hood reported that Starfield's launch day set a new record for the most new Xbox Game Pass subscriptions in a single day. This fed into “better-than-expected subscriber growth” for Game Pass during the quarter, with the subscription service also seeing a new record for the number of hours played per user.

Xbox content and services saw more growth in the most recent quarter than it did in any quarter last year, driven by growth in first-party content and Xbox Game Pass.

During the investor call, Microsoft execs also discussed the initial impact of the Activision Blizzard acquisition, which closed earlier this month.

Call of Duty: Modern Warfare 3 was highlighted as a key first-party release for the next quarter, with regular reminders to investors that Activision games will now come under first-party revenue rather than third-party, which will impact expected figures for both in future