Xbox Exceeded Growth Targets for the First Time Since 2020; Microsoft Executives Received Bonuses

For the first time since 2020, Xbox exceeded its planned growth targets for the fiscal year ended June 30, 2025, according to Microsoft’s latest report to shareholders. The unit’s performance positively affected executive bonuses for the first time in years, including those awarded to CEO Satya Nadella.

According to the filings, the target required more than a 14% increase in revenue from Xbox content and services. That category covers digital games, DLC, subscriptions, advertising, cloud services and royalties. The actual increase was around 15%, surpassing the goal and automatically triggering bonus payments.

This outcome matters beyond the balance sheet: it closes a four-year stretch of underperformance. Between 2021 and 2024 Xbox repeatedly missed internal goals—initially for Game Pass subscriber growth and later for digital content revenue. At the same time, other Microsoft divisions such as Azure, LinkedIn and Teams consistently met their targets. For the gaming division, the repeated shortfalls reflected the difficulty of expanding in an already saturated market.

Outperforming the plan in 2025 represents a turning point. Xbox is now betting on multiplatform strategies and expanding its digital offerings. Moves like releasing Halo: Campaign Evolved on PlayStation 5, together with steady Game Pass growth, have helped stabilize revenue and strengthen the unit’s resilience.

Analysts caution that the improvement doesn’t tell the whole story: these metrics don’t reflect overall profitability or costs related to licensing and development. Still, for Microsoft it’s a constructive sign — the company is consolidating its position within the digital ecosystem.

Satya Nadella, who received $96.5 million over the year, said, “Our aim is not merely to grow revenue, but to build meaningful connections between platforms and players.”

Source: iXBT.games