Microsoft has reported revenue from its gaming business has surpassed its Windows division for the first time, boosted by the company’s massive $69bn acquisition of Activision Blizzard. 

The tech giant made $62bn in revenue and a net income of $21.9bn during the second quarter of its 2024 financial fiscal results. Its revenue rose 18% with net income increasing by 33%. 

Gaming revenue increased 50% to $7.1bn for the quarter, this included over $2bn in revenue from Activision Blizzard. This earnings report is the first time the Call of Duty and Candy Crush publisher’s earning results have been included in Microsoft’s revenue. 

Microsoft reported that Windows revenue rose to $5.3bn for the quarter, marking a rise of 9.5%. This was pushed on by an 11% increase in sales of Windows PCs.

However, the healthy return to growth for Windows PC sales was not enough to catch up to the gaming unit. This marks a historic milestone for Microsoft Windows, which has long been the frontrunner for Microsoft revenue. 

Although the Activision Blizzard acquisition has helped boost Microsoft’s gaming business well ahead, video games have been edging closer to Windows for some time now. 

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By GlobalData

This time last year Microsoft’s gaming unit fell just $50m below its Windows revenue.

Rupantar Guha, analyst at research company GlobalData, told Verdict that the acquisition of Activision Blizzard has reinforced Microsoft’s gaming leadership.

“One of the quickest ways to excel in a theme is to acquire a company that is already excelling,” Guha said.

“The acquisition reflected Microsoft’s focus on the thriving mobile gaming and esports sectors, where Activision Blizzard was dominant,” he added.

The gaming software market was worth $197bn in 2021 and will become a $470bn industry by 2030, according to GlobalData’s Video Games: Thematic Research 2022 report.

Mobile gaming will be the dominant segment, accounting for more than half of global gaming software revenues by 2030, according to the research company.