Xbox Hardware Revenue Drops 14% as Microsoft Cites Console Supply Limits
Xbox revenue slipped 2% to $5.38 billion in Microsoft's latest quarter, with hardware down 14%. Executives blamed supply constraints and shifts in content sales.
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Microsoft's gaming division recorded another revenue decline in the first quarter of its 2027 fiscal year, which closed on September 30, according to reporting from TechPowerUp.
Xbox revenue reached $5.38 billion, a 2% fall from $5.51 billion in the same period a year earlier. The drop ran counter to Microsoft's broader performance: the company's total revenue climbed 19% to $92.3 billion. GamesIndustry.biz reported that Microsoft beat first-quarter expectations, posting gains in net income and earnings per share.
Within the gaming segment, content and services revenue declined 2%, while hardware fell more sharply at 14%, which TechPowerUp attributed to fewer consoles sold. Chief Financial Officer Amy Hood said the overall Xbox decrease stemmed from third-party content and Xbox Game Pass, offset in part by growth in first-party titles.
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