Microsoft has detailed its earnings for the first quarter of its 2024 fiscal year, pointing to a record-breaking Q1 for Xbox gaming revenue, despite a 7 percent drop in hardware sales.

Over the course of Microsoft's Q1 2024, which covers 1st July to 30th September, Xbox generated $3.9bn USD in gaming revenue - equating to a 9 percent year-on-year increase - which the company attributed to strong performance from first-party titles and Game Pass.

Not coincidentally, Xbox's record-breaking Q1 encompassed the long-awaited launch of Bethesda's Starfield, which surpassed 10m players within its first few weeks of release - and in an investor call following today's fiscal report, Microsoft CEO Satyda Nadella confirmed the game provided a significant boost for Game Pass, setting the record at launch for the "most Game Pass subscriptions added on a single day ever" (as per The Verge's Tom Warren).

All in all, Xbox's content and services revenue increased by 13 percent, but that was somewhat offset by hardware performance, where Microsoft had less success - seeing a 7 percent year-on-year drop in revenue, thanks to reduced console sales.

Microsoft's Q1 2024 earnings report did not factor in figures from the company's recently completed $69bn acquisition of Activision Blizzard, but the impact the long-in-the-works deal has on Xbox should become clearer as it moves into its next fiscal quarter and beyond.