The news: Microsoft’s gaming division posted strong Q4 FY25 results, powered by flagship franchises, growing subscription revenues, and a reach that now spans over 500 million monthly active users (MAUs).

According to CEO Satya Nadella, Xbox was the top third-party publisher on both its own platform and PlayStation—underscoring the success of its content strategy across ecosystems. Major IPs like Call of Duty: Black Ops 6 and Minecraft drove the surge, with the former engaging 50 million players and the latter achieving all-time highs in monthly users and revenues.

Subscription gaming library Game Pass continues to gain traction, now generating nearly $5 billion annually; Microsoft also reported that cloud gaming passed 500 million streamed hours for the fiscal year, and the company has nearly 40 new titles in development across first-party studios.

Why it matters: Microsoft’s gaming ecosystem combines massive reach with emerging ad formats like in-game placements, branded experiences, and curated inventory across major franchises. As gaming becomes a high-engagement, brand-safe environment with measurable performance, Microsoft is positioning Xbox not just as entertainment, but as a scalable, ROI-driven ad platform.

After years of aggressive investment and acquisitions, Xbox is now a high-scale entertainment engine. Microsoft’s claim of 500 million MAUs places it among the world’s largest gaming ecosystems, rivaling Sony and Tencent in reach. This growth is tightly tied to console gaming, which remains core to Xbox’s identity and market position.

Forty-seven percent of US players use consoles, with Gen Alpha and Gen Z console usage at 69% and 65%, respectively—demographics where Microsoft’s franchises like Call of Duty and Minecraft thrive. While mobile dominates in raw numbers (82% overall usage), console remains crucial for immersive, franchise-driven gameplay and monetization.