Microsoft's gaming business shrank again in the first quarter of its 2027 fiscal year, which ended on September 30. Xbox revenue came in at $5.38 billion, down 2% from $5.51 billion a year ago, while Microsoft as a whole grew revenue by 19% to $92.3 billion. Content and services revenue fell 2%, and hardware dropped a bigger 14% on a lower volume of consoles sold.
CFO Amy Hood said the overall Xbox decline was driven by third-party content and Xbox Game Pass, partly offset by growth in first-party games. Microsoft Gaming CEO Asha Sharma, however, put a positive spin on the numbers in a post on X. She pointed out that the 2% decline is much smaller than the 10% drop a quarter earlier, and that margins improved.
Sharma also listed record results for Minecraft and World of Warcraft Forever, called Modern Warfare 4 Call of Duty's most acclaimed release in over a decade, and said PC platform revenue grew by double digits. As for hardware, Sharma claims console sales are being held back by supply, with demand currently outpacing the number of consoles available. She added that Xbox is working to get more units out to players, partly through an expanded refurbishment program.
Microsoft expects content and services to grow by mid-to-high single digits next quarter, while hardware is expected to decline again.
Source: TechPowerUp News · Summarized by HeadlinesBriefing