As part of the recent Microsoft earnings call, CEO Satya Nadella has revealed that Game Pass has been doing quite well. Nadella praised the subscription service for setting a new quarterly record for not only revenue but the growth in its subscribers as well.
According to Nadella, the subscriber base for PC Game Pass grew by more than 30 percent in Q2 2025. This likely contributed to the two percent rise in revenue from Xbox content and services, including Game Pass subscriptions alongside Xbox and PC game sales.
“All-up, Game Pass set a new quarterly record for revenue and grew its PC subscriber base by over 30%, as we focus on driving fully paid subscribers across endpoints,” said Nadella in the earnings call.
Nadella also praised the critical response for Indiana Jones and the Great Circle, as well as the sales of Call of Duty: Black Ops 6. The latest Call of Duty topped charts on both Xbox and PlayStation. Xbox Cloud Gaming also got a shout-out, with Nadella praising 140 million hours worth of gaming streamed through the service in the quarter.
“Black Ops 6 was the top-selling game on Xbox and PlayStation this quarter – and saw more players in its launch quarter than any other paid release in franchise history,” said Nadella. “And we saw rave reviews of Indiana Jones and the Great Circle, which has already been played by more than 4 million people.”
Looking forward, Microsoft CFO Amy Hood said the company expects growth from Xbox to be in the low single digits. She also noted that it expects revenue from hardware sales to decline. The growth for Xbox is expected to come from software sales as well as the steadily growing subscriber base for Game Pass.
“And in Gaming, we expect revenue growth to be in the low single digits,” said Hood. “We expect Xbox content and services revenue growth to be in the low to mid-single digits driven by first-party content and Xbox Game Pass. Hardware revenue will decline year-over-year.”
It is worth noting that, while Xbox made money on the content and services side of things, Microsoft also reported a 29 percent fall in revenue for console hardware. The overall revenue for the division sits at seven percent lower than Q2 2024.
Console sales have certainly been falling according to Circana analyst Mat Piscatella. It is also quite likely that Microsoft’s recent acquisition of Activision Blizzard, which set the company back by around $69 billion, might have played a role in the lower reported revenue.
Despite Nadella praising the growth of Game Pass, especially on PC, previous reports have indicated that developers might end up losing out on sales when bringing their titles to the service. Multi-platform games, on the other hand, seemed to see quite a bit of benefit from coming to Game Pass, especially for multiplayer. Sales tended to rise on PlayStation as well as Xbox owing to larger player bases thanks to Game Pass.
