Microsoft’s Q2 2024 financial results have been released, and they reveal a substantial increase in revenue within its gaming division, particularly in Xbox content and services revenue. This surge follows the company’s acquisition of Activision Blizzard for $69bn.

According to the Q2 earnings release, Microsoft’s gaming revenue surged by 49 percent compared to the same quarter in the previous financial year. The company experienced a remarkable 61 percent rise in Xbox content and services revenue, which includes income from Game Pass, as well as a three percent increase in Xbox hardware revenue.

Not surprisingly, the acquisition of Activision Blizzard played a significant role in Microsoft’s Q2 growth, contributing over $2bn in revenue. However, operating expenses and other costs resulted in a net operating loss of $440m as a result of the deal.

These latest figures indicate that gaming is now the third largest business for Microsoft, contributing more than $7.1bn in revenue for the latest quarter.

This positive performance in gaming revenue comes on the heels of the announcement that Microsoft would be laying off 1,900 workers across its video game teams. This decision will affect employees at Activision Blizzard, ZeniMax, and Xbox, amounting to approximately eight percent of Microsoft’s total gaming workforce. Xbox CEO Phil Spencer described these cuts as a “painful decision.”

Additionally, Blizzard president Mike Ybarra has departed from Microsoft, and former Call of Duty general manager Johanna Faries is set to take over the role.