The company says that its Xbox content and services revenue grew 61 percent year over year from the previous quarter — a figure driven by "53 points of net impact from the Activision acquisition," according to the company's press release. But hardware revenues again declined, down 29 percent this quarter, which may be influenced by Microsoft's continued strategy to make its games available more widely than just Xbox consoles.
During the quarter, Microsoft introduced its new Xbox Game Pass "Standard" tier and a price hike for Xbox Game Pass Ultimate. Q1 also saw the arrival of Call of Duty: Modern Warfare III on Xbox Game Pass, but this quarter doesn't include the impact of Call of Duty: Black Ops 6, which launched last week. (Microsoft CEO Satya Nadella said on its earnings call that the game was the "biggest Call of Duty release ever.")