Microsoft gaming revenue drops 7% as of June 30

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Microsoft disclosed in its earnings report today that its gaming revenue declined 7% (5% in constant currency) in the fiscal fourth quarter ended June 30, compared to a year ago.

Xbox content and services revenue decreased 6% (4% in constant currency), due to lower engagement hours and monetization of third-party and first-party content. It was partially offset by growth in Xbox Game Pass subscriptions.

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And Microsoft said Xbox hardware revenue was down 11% (down 8% in constant currency). The global division that includes games saw its operating profit tumble in the June quarter, from $4.8 billion a year ago to $4.6 billion last quarter, but revenues fell from $14.1 billion a year ago to $14.3 billion.

The More Personal Computing division includes games, including Xbox hardware and Xbox content and services, Xbox Game Pass and other subscriptions, video games, third-party video game royalties, cloud services and advertising .

Microsoft chief financial officer Amy Hood said on a call with analysts that the results didn’t include anything from Activision Blizzard, which Microsoft is buying for $68.5 billion. She said she still expects that deal to close in the current fiscal year. Hood said gaming revenue was in line with expectations.

Revenue in the More Personal Computing division is expected to increase 1% to 4% in constant currency, or $13 billion to $13.4 billion. Gaming is expected to drop in the lower to mid numbers, due to a decline in first-party title launches. This will be offset by the growth of Xbox Game Pass, Hood said.

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