Microsoft's gaming division, driven by Activision Blizzard, achieved a record third quarter despite a significant decline in Xbox hardware sales. The company's gaming revenue increased by 51% year-on-year, with Xbox content and services revenue up by 62%. However, Xbox hardware revenue fell by 31%, marking the steepest decline since the launch of the Xbox Series X|S. Notably, Diablo was one of the biggest first-party Game Pass launches, amassing 10 million hours played within just 10 days. Microsoft CEO Satya Nadella highlighted the company's strategy to meet players where they are, as evidenced by Xbox having more games among the top 25 sellers on the PlayStation Store than any other publisher. Over the past eight quarters, six have seen Xbox hardware revenues decline, and a similar performance is expected in the next quarter.