Xbox Hardware Revenue Falls 14% as Gaming Sales Decline

Microsoft has reported another decline in Xbox revenue, with console hardware sales falling 14% year over year during the first quarter of fiscal year 2027.

The results cover the three months ending September 30, 2026, and were published on October 28 as part of Microsoft's latest financial earnings report.

According to the official Microsoft earnings release, total Xbox revenue reached $5.379 billion, compared with $5.508 billion during the same quarter last year. That represents a decrease of $129 million, or approximately 2%.

Xbox hardware revenue declined 14%, primarily because fewer consoles were sold. Microsoft did not disclose the exact number of Xbox Series X and Series S units shipped during the quarter.

The company's gaming content and services business also recorded a 2% decline. Microsoft attributed the decrease to weaker third-party content sales and lower Xbox Game Pass revenue, partially offset by growth in first-party content.

However, the financial results do not establish whether Game Pass lost subscribers, as Microsoft did not publish an updated subscriber count.

The Xbox figures contrast with Microsoft's overall financial performance. Company-wide revenue increased 19% to $92.3 billion, while net income rose 32% to $36.6 billion.

Microsoft also reported $15.5 billion in revenue for its Devices and Consumer division, representing a 3% year-over-year decrease.

The results highlight continued pressure on Xbox hardware sales and gaming services, even as Microsoft's cloud and enterprise businesses deliver substantial growth.