Microsoft’s Ai Business Is Booming — Xbox, Not So Much

21 hours ago

ARTICLE AD BOX

Jay Peters is a news editor who writes astir technology, video games, and virtual worlds. He’s submitted respective accepted emoji proposals to nan Unicode Consortium.

Microsoft’s unreality and AI businesses are doing beautiful bully — and their effect is being felt crossed nan company. In its Q2 2025 earnings, Microsoft announced gross of $69.6 cardinal for nan quarter, up 12 percent year-over-year, and nett income of $24.1 billion, which is up 10 percent year-over-year.

As for nan AI business, CEO Satya Nadella says successful a relationship that it has “surpassed an yearly gross tally title of $13 billion, up 175 percent year-over-year.” The company’s Azure and different unreality services business grew 31 percent year-over-year, a flimsy alteration from 33 percent YoY maturation nan erstwhile quarter.

The company’s gaming revenues didn’t fare truthful well. Gaming gross declined 7 percent, and Xbox hardware gross declined 29 percent. Microsoft has been moving distant from a attraction connected its ain hardware pinch messaging for illustration its “This is an Xbox” advertisement run and bringing Xbox Game Studios games to different platforms, and those changes could beryllium contributing to nan decline.

That intends nan attraction is alternatively connected games and services, and that’s wherever nan business is seeing immoderate improvements. Xbox contented and services gross were up 2 percent, “driven by maturation successful Xbox Game Pass,” Microsoft says. (Last quarter, Microsoft’s package gaming revenues were measurement up moreover arsenic Xbox hardware gross declined.)

Microsoft too said that it saw Windows OEM and Devices gross maturation of 4 percent year-over-year, a flimsy bump from 2 percent successful Q1.

We’ll update this communicative pinch point notable from Microsoft’s nett call, which kicks disconnected astatine 5:30PM ET. Nadella typically speaks during nan call, and successful summation to rubbing connected nan company’s erstwhile quarter, we’re funny if he’ll talk caller developments for illustration nan Stargate AI infrastructure project, nan emergence of DeepSeek, aliases his selfie pinch OpenAI CEO Sam Altman.