During Microsoft's financial conference call for investors and analysts, chief executive officer Satya Nadella and chief financial officer Amy Hood provided more insight into the performance of the Xbox business.
Nadella mentioned the extension of the deadline for the Activision Blizzard merger and expressed confidence in the company's ability to close the deal.
He also talked about the game development pipeline exhibited at the Xbox Game Showcase and mentioned the upcoming arrival of Bethesda's Starfield.
We also hear that Xbox set a new Q4 record for monthly active users and engagement across Game Pass, which saw hours played up 22% year-on-year.
Last week, we extended our Activision Blizzard merger agreement deadline to October. We continue to work through the regulatory approval process and remain confident about getting the deal done. We are committed to Bringing more games to more players everywhere.
Great content is key to our approach, and our pipeline has never been stronger. We announced our most ambitious lineup of games ever at our showcase last month, including 21 titles that will be available via Xbox Game pass, and we're looking forward to the release of Starfield, Bethesda's first new universe in 25 years.
All up, we set new fourth quarter highs for monthly active users driven by strength of console as well as monthly active devices. And we saw a record fourth quarter engagement across Game Passs with hours played up 22% year-over-year.
And just last week, we announced Game Pass Core, bringing together online play from Xbox Live and content from Game Pass into a single offering.
Hood mentioned that the weaker-than-expected performance of the gaming business in the previous quarter (between April and June) was due to "weakness in first and third-party content performance." While it wasn't mentioned by name, it's likely that Redfall's mediocre performance played a role.
She also provided the outlook for the current quarter (between July 2023 and September 2023), clarifying that it does not include the acquisition of Activision Blizzard, since it hasn't been completed yet. Microsoft expects gaming revenue to grow in the mid single digits (around 5%), while Xbox content and services revenue is expected to grow in the mid-to-high single digits (roughly between 5-9%) driven by first-party and third-party content and Xbox Game Pass.
If you'd like to hear more about Microsoft's financial results, you can check out our dedicated article focusing on the quarterly performance of the Xbox business, published earlier today.
