After laying off 15,000 employees, Microsoft reveals Xbox Game Pass revenue hit nearly $5 billion

[midian182]

What just happened? Despite Microsoft laying off over 15,000 employees so far this year, the company has just revealed that revenue from its Xbox Game Pass service reached almost $5 billion for the first time over the last year. Overall company revenue for the fourth fiscal quarter was up 18%, while net income jumped 24%.

Microsoft's Xbox content and services revenue, which include Xbox Game Pass, was up 13% for the quarter. CEO Satya Nadella said on an earnings call that Game Pass revenue had reached "nearly $5 billion" over the last year.

While Microsoft doesn't reveal specific subscriber numbers, an employee's profile suggested it had reached 35 million two months ago – Microsoft confirmed that they were at 34 million in February 2024. However, Nadella did say that Microsoft has 500 million active users across multiple gaming platforms and devices.

There have been a series of big day-one first-party releases on Game Pass over the last year, including Indiana Jones and the Great Circle, Doom: The Dark Ages, and Elder Scrolls IV: Oblivion Remastered. Microsoft also launched games on PS5 this year, including Forza Horizon 5, Age of Empires II: Definitive Edition, Age of Mythology: Retold, and Indiana Jones.

"We are now the top publisher on both Xbox and PlayStation this quarter," said Nadella.

Overall gaming revenue for Xbox was up 10% YoY, increasing by $2 billion for the whole fiscal year. Unsurprisingly, however, Xbox hardware revenue was down 22%. Microsoft increased the price of Xbox consoles and controllers worldwide in May, pushing the Xbox Series X up by $100 to $599. It also increased the base price of its games to $80 but has since reversed that decision following a backlash (EA did the same thing).

As always, Azure cloud services were the highlight of Microsoft's financial report. Revenue grew 39% YoY during the quarter and surpassed $75 billion for the entire financial year, marking a 34% increase.

Last week, Nadella addressed – or tried to – the fact that Microsoft was experiencing plenty of success while laying off more than 15,000 people this year, including a large round of 9,000 in early July. He called it "an enigma of success in an industry that has no franchise value." He also thanked departing employees for their contributions, which one imagines wouldn't have made things easier for them, especially as the company has reported another quarter of impressive growth.

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After laying off 15,000 employees, Microsoft reveals Xbox Game Pass revenue hit nearly $5 billion

 

[Theinsanegamer]

Stop buying from Microsoft. So simple.

 

[Megalomaniac]

Where are the new exclusives?

 

[wiyosaya]

Surprise, Surprise. The only thing that Microsoft cares about is the $5-billion. They don't GAS about the employees they laid off. Anyone thinking otherwise, is fooling themselves, IMO.

 

[techstrike]

I feel like the big techs becoming more arrogant from day to day ... don't they care about their reputation nowadays?

 

[J95qRP7]

Forget about all those people with thier "problems" and "needs". You're not thinking about the company, Microsoft. They only made revenue of $76 billion for the quarter ended June 30, 2025. How can they afford to pay people to make content, when they need to pay for AI?!?

 

[bviktor]

That title is just plain stupid. Pure ragebait. As if MS laid off all those employees from Xbox... why would you cherry-pick some random metrics from their financials lol.

In any case, people seem to confuse layoffs with job cuts. Yes, MS is doing fine. That doesn't mean they don't want to replace their bottom performers with new hires regularly. All successful companies are doing this.

In fact, that's precisely how they remain competitive. Yes, the process is never perfect, but it's still needed. And I'm saying this as someone who's been laid off this February. But I won't pretend I was a perfect employee either.

 

[etempest]

What's not covered in the article, is the cuts are mainly due to expected future spending on AI related things.

 

[Theinsanegamer]

I feel like the big techs becoming more arrogant from day to day ... don't they care about their reputation nowadays?

Why would they? Meta, alphabet, Microsoft, all have become massively wealthy and powerful despite constant controversy and rights violations. They have no incentive to keep up the effort of keeping the mask up. Arrogance tends to follow prolonged power and that's exactly what we see today.

Won't change unless some massive hammer smacks into these companies, either breakups or competition. I won't be holding my breath.

 

[FaTaL]

Surprise, Surprise. The only thing that Microsoft cares about is the $5-billion. They don't GAS about the employees they laid off. Anyone thinking otherwise, is fooling themselves, IMO.

It was needed. Gaming industry was over saturated with developers due to COVID... and 95% of games released in last few years were absolute crap... (more crap than normal)...either the game itself fundamentally sucked or was bug ridden...or both.

 

[ferrellsl]

As a software developer I have to shake my head and wonder why it takes more than 15,000 employees to develop a game. I suppose someone in Microsoft's higher management posed the same question and realized that 15,000+ people is a bit absurd. It's shocking that the gaming division was allowed to grow so large in the first place.

 

[Rudyduu]

That title is just plain stupid. Pure ragebait. As if MS laid off all those employees from Xbox... why would you cherry-pick some random metrics from their financials lol.

In any case, people seem to confuse layoffs with job cuts. Yes, MS is doing fine. That doesn't mean they don't want to replace their bottom performers with new hires regularly. All successful companies are doing this.

In fact, that's precisely how they remain competitive. Yes, the process is never perfect, but it's still needed. And I'm saying this as someone who's been laid off this February. But I won't pretend I was a perfect employee either.

Who said anything about poor performance? Why would HR identify poor performers and then keep them on until a large way of layoffs? That's not how companies get rid of poor performers.

It was needed. Gaming industry was over saturated with developers due to COVID... and 95% of games released in last few years were absolute crap... (more crap than normal)...either the game itself fundamentally sucked or was bug ridden...or both.

You provided zero evidence to support your opinion. The number of people it takes to develop a game isn't directly proportional to a game's quality or entertainment value.

 

[DZillaXx]

The Layoffs are a result of wanting to trim fat and follow what other fortune 500 companies are doing. Nothing more. You'd have to be living under a rock to not notice all the layoffs in tech regardless of record profits.

Also doesn't help that layoffs and closures in the gaming department is partly because they let these game companies run wild with creating new titles that are flawed from the original idea. MS isn't the only one that has had this issue with Dev teams, but sorry but when you are two years in and still working on a game that is bound to flop it just needs to be shut down. Halo infinite is a prime example, they were allowed to make dumb choices and explore a flawed design path. It should have been shutdown the way Nintendo shut down Prime 4. You start from scratch and tell your fan base your sorry but they'll have to wait even longer.

Game Devs know the business

Layoffs happen

I'm sure there is more fat that could be trimmed, tricky game is finding those that really need to be let go vs playing the lottery game.

 

[SRB]

The Layoffs are a result of wanting to trim fat and follow what other fortune 500 companies are doing. Nothing more. You'd have to be living under a rock to not notice all the layoffs in tech regardless of record profits.

Also doesn't help that layoffs and closures in the gaming department is partly because they let these game companies run wild with creating new titles that are flawed from the original idea. MS isn't the only one that has had this issue with Dev teams, but sorry but when you are two years in and still working on a game that is bound to flop it just needs to be shut down. Halo infinite is a prime example, they were allowed to make dumb choices and explore a flawed design path. It should have been shutdown the way Nintendo shut down Prime 4. You start from scratch and tell your fan base your sorry but they'll have to wait even longer.

Game Devs know the business

Layoffs happen

I'm sure there is more fat that could be trimmed, tricky game is finding those that really need to be let go vs playing the lottery game.

I'm sorry, but you seem to give these companies credit for being on their game and laying off because they are constantly improving with fewer employees as well as R&D. The only goal is to maintain sales, through monopoly, quickly jumping on the next fad (AI), or sheer luck.

I would agree with you if it weren't for the fact that just about every aspect of Microsoft, with the exception of AI (it's too new), has not just failed to improve, but has gotten worse. You need look no further than these pages: Outlook issues, login issues, search degradation, OS patches that brick systems, games launching not ready for prime time.

Everyone is betting big on AI and pretty much kicking everyone else to the curb. I'm old enough to remember a time when employees who were a big part of contributing record revenue were rewarded for their hard work, not given a pink slip. All for the mantra of "Shareholder value" I.e. the stock price.

The dead giveaway that the stock market has become a casino is the fact that the whole market is tumbling due to job revisions including the companies with record revenues. People are being fired not for clearing dead weight, but for trying to get ahead in the race to guess how do best to please investors.

This is the simple reason we've abandoned manufacturing, including things that dangerous to depend on other countries for (Pharma, steel aluminum,fertilizer, chips, rare earths, etc.). Not because you can't make money on these things, because you can't make ENOUGH money.

The bigger problem with this version of capitalism comes down to how do you answer this simple question: "How much money is enough?" You might also ask: "Are their any considerations, to either society or the country, that should be considered in the quest for higher stock prices?"

My guess at this point is NO!!!

 

[Gravitytr1]

Why would they? Meta, alphabet, Microsoft, all have become massively wealthy and powerful despite constant controversy and rights violations. They have no incentive to keep up the effort of keeping the mask up. Arrogance tends to follow prolonged power and that's exactly what we see today.

Won't change unless some massive hammer smacks into these companies, either breakups or competition. I won't be holding my breath.

Why would they? Meta, alphabet, Microsoft, all have become massively wealthy and powerful despite constant controversy and rights violations. They have no incentive to keep up the effort of keeping the mask up. Arrogance tends to follow prolonged power and that's exactly what we see today.

Won't change unless some massive hammer smacks into these companies, either breakups or competition. I won't be holding my breath.

Why would they? Meta, alphabet, Microsoft, all have become massively wealthy and powerful despite constant controversy and rights violations. They have no incentive to keep up the effort of keeping the mask up. Arrogance tends to follow prolonged power and that's exactly what we see today.

Won't change unless some massive hammer smacks into these companies, either breakups or competition. I won't be holding my breath.

Let's calm down with the pro human antis.... *Cough* wrong word, I mean the anticorporate speak. Very soon that will be illegal and corporations and gov will look back and see who said what against Microsoft and co and who supported them (other than the bots).

Don't get put on an anticorporate list!