Xbox revenue fell by $129 million, or 2%, year over year in Microsoft’s first quarter of fiscal 2027. The company’s report, released on October 28, covers the three months from July through September 2026 and compares them with the same period a year earlier.
Xbox content and services revenue declined 2% as reported and 1% in constant currency. Microsoft attributed the decline to lower revenue from third-party content and Xbox Game Pass, partially offset by growth in revenue from its own games.
Xbox hardware revenue dropped 14% year over year. Microsoft’s quarterly filing attributes that decline to a lower volume of consoles sold.
Xbox head Asha Sharma said demand for consoles exceeds the available supply and that limited supply is constraining sales. She pointed to the expanded refurbished-console programme as part of efforts to get more consoles into players’ hands. Sharma also reported double-digit growth in Xbox revenue on PC.
