Xbox Revenue Declines 2% in September 2026 Quarter, Hardware Revenue Falls 14%

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Xbox Revenue Declines 2% in September 2026 Quarter, Hardware Revenue Falls 14% – Sales

Microsoft has released its earnings report for the first quarter of the 2027 fiscal year, which ended up September 30, 2026.

Total Xbox revenue was $5.38 billion for the quarter, which is down two percent from $5.51 billion in the same period a year ago. This is the fifth quarter in a row Xbox revenue has declined.

Xbox content & services revenue decreased two percent compared to the same quarter a year ago. This is slightly better than the forecast, which expected a decline in the mid single digits percent (-4% to -6%).  This was “driven by declines in third-party content and Xbox Game Pass, partially offset by growth in first-party content.”

Xbox hardware revenue dropped 14 percent year-on-year. This is inline with the forecast, which was for a decline. Microsoft did increase the price of the Xbox Series X and Sin the US on October 3, 2025, as well as worldwide on August 1, 2026.

Overall for the quarter, Microsoft reported for the quarter revenue was up 19 percent year-over-year to $92.3 billion, operating income increased 21 percent to $45.9 billion, and net income on a GAAP basis was up 32 percent to $36.6 billion.

Stay tuned for more information…

A life-long and avid gamer, William D’Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can follow the author on Bluesky.