Microsoft’s Xbox Game Pass continues to show strong growth, fueled by major releases like Indiana Jones and the Great Circle and Call of Duty: Black Ops 6, while Xbox hardware sales tell a different story.
During the latest Q2 investors call, Microsoft CEO Satya Nadella confirmed that Indiana Jones and the Great Circle has already reached 4 million players, proving to be a major hit for MachineGames and an exciting new chapter for the legendary franchise. The game’s availability on Game Pass undoubtedly contributed to its rapid player base expansion, even if precise sales figures remain unclear. You can watch our first impressions on this game.
Beyond Indiana Jones, Game Pass on PC grew by 30% last quarter, setting a new revenue record. Microsoft’s cloud gaming service also saw significant engagement, with 140 million hours of streamed gameplay logged. These successes helped Xbox’s content and services revenue rise by 2%.
However, the overall picture isn’t all good news. Xbox gaming revenue declined 7%, and hardware sales saw a steep 29% drop. The downturn suggests that while Game Pass continues to thrive, console sales and traditional hardware demand are faltering.
The continued push for Game Pass-first releases is proving effective, especially with day-one access to blockbuster titles like Call of Duty, Microsoft Flight Simulator, and Indiana Jones, which keep players engaged. However, Microsoft still faces challenges in balancing Game Pass expansion with the sluggish performance of Xbox hardware in a competitive market.
With upcoming exclusives and further Game Pass integration, Microsoft appears committed to software and services growth, even if hardware struggles persist. The question now is whether this approach will be enough to counter PlayStation’s continued dominance in console sales or if new hardware strategies will emerge to revitalize Xbox’s standing in the gaming landscape.
