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Microsoft says Starfield is driving Xbox Game Pass subscriptions

Xbox Game Pass is doing "better-than-expected," but hardware sales are down year-on-year.

Chris Kerr, News Editor

October 25, 2023

1 Min Read
Key artwork for Starfield

Microsoft says the "strong" launch of Starfield drove an increase in Xbox Game Pass subscribers during the first quarter of the fiscal year.

According to the Xbox maker's fiscal report for the quarter ended September 30, 2023, gaming revenue surged by 9 percent year-on-year. Microsoft noted that performance was "ahead of expectations [and] driven by better-than-expected subscriber growth in Xbox Game Pass as well as first-party content, primarily due to the Starfield launch."

For context, Starfield attracted 10 million players within two weeks and (as with all Xbox Game Studios titles) was made available to Xbox Game Pass subscribers on day one.

Drilling down into the segment, Xbox content and services revenue increased by 13 percent year-on-year. But while revenue within the sub-division increased overall, Microsoft noted that hardware revenue actually declined by 7 percent year-over-year. That's despite the recent launch of an upgraded 1TB Xbox Series S.

Looking ahead to the second quarter of the current fiscal year, Microsoft expects to see revenue growth of at least 40 percent within its gaming division. That figure includes roughly "35 points of net impact from the Activision acquisition."

It also expects the colossal merger to deliver Xbox content and services revenue growth "in the mid to high 50s, driven by roughly 50 points of net impact from the Activision acquisition."

Glancing briefly at Microsoft's consolidated results for the quarter, revenue increased by 13 percent year-on-year to $56.5 billion and operating income rose by 25 percent to $26.9 billion.

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[Company] Xbox

About the Author(s)

Chris Kerr

News Editor, GameDeveloper.com

Game Developer news editor Chris Kerr is an award-winning journalist and reporter with over a decade of experience in the game industry. His byline has appeared in notable print and digital publications including Edge, Stuff, Wireframe, International Business Times, and PocketGamer.biz. Throughout his career, Chris has covered major industry events including GDC, PAX Australia, Gamescom, Paris Games Week, and Develop Brighton. He has featured on the judging panel at The Develop Star Awards on multiple occasions and appeared on BBC Radio 5 Live to discuss breaking news.

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