Microsoft announced its financial results for the first quarter of fiscal year 2027, related to the period between June and September 2026, including the metrics for the Xbox business.
According to the official documents, Xbox revenue was $5,379 million for the quarter, down 2% ($129 million) year-on-year.
Xbox Content and Services themselves declined 2% year-on-year, mostly due to drops in third-party software revenue and Game Pass, partly offset by growth in revenue for first-party content.
Xbox hardware revenue declined 14% year-on-year due to the lower volume of consoles sold.
The fact that the much larger decline in hardware revenue (in terms of percentage) doesn’t make the overall decline budge further than the 2% recorded by Content and Services pretty much shows how negligible console sales are in the grand scheme of things.
Interestingly, the decline in revenue was actually smaller than Microsoft’s own expectations. During the latest financial conference call, CFO Amy Hod mentioned she expected a decline for Content and Services in the “mid-single-digits.”
Incidentally, the Xbox business was reorganized within the “Device and Consumer” business, while before it was part of the obscurely named (and now gone) “More Personal Computing” business.
In terms of the whole company, quarterly revenue was $92.3 billion, up 19% year-on-year. Operating income was $45.9 billion, up 21% year-on-year.
If you’re interested in comparing the results announced today with historical data, you can read our article dedicated to the previous quarter’s financial results, announced in July.
Other gaming companies have already announced their financial results this quarter, including Koei Tecmo and Capcom. You can expect plenty more reports on this topic in the coming days and weeks.
