According to the second fiscal quarter revenue data released by the company, Xbox content and services (including XGP) business revenue increased significantly by 61%, pushing the game division's revenue to $7.11 billion, surpassing the Windows division's $5.26 billion. This is the first time that Microsoft has included the operating results of Activision-Blizzard into the Xbox business unit in its financial report. As a result, the revenue of this unit has skyrocketed, and it has now become Microsoft's third largest business unit, surpassing the company's fortune business in one fell swoop, second only to enterprise cloud (US$23.95 billion) and Office (US$13.47 billion), achieving a historic leap.
However, the Windows business bucked the trend and grew by 11%, recording growth for two consecutive quarters; hardware sales revenue has declined for five consecutive quarters, with a drop of 9% this quarter. Surface continues to slump, while Xbox hardware sales only grew by 3% due to the dual promotion of price reductions and the Christmas shopping season. It was only Activision-Blizzard that increased the overall gaming business revenue by 49%, which concealed the true performance of Xbox and XGP - Microsoft has not announced XGP subscription figures for two consecutive years.
The financial report specifically pointed out that Activision-Blizzard brought net income of US$2 billion to the company, but acquisition and integration costs were as high as 930 million, and operating expenses were 1.59 billion, resulting in business losses, with a total loss of US$440 million. The company has laid off 1,900 game department employees, mostly Activision-Blizzard employees, and appointed a Blizzard female president to replace Mike Ybarra, who retired after his retirement.
This female executive was previously responsible for running CoD and is now the head of Blizzard, shattering the ambition of Diablo head Rod Ferguson to become the president of Blizzard.