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William D'Angelo
published 8 hours ago / 1227 views
Microsoft has released income statement for the first quarter of fiscal year 2026, which ended September 30, 2025.
Xbox Gour income decreased by $113 million, or two percent, year-over-year to $5.51 billion. This was driven by a reduction in hardware, partially offset by growth in content and services. This is better than forecasts, which had projected declines of mid to high single digits (-4% to -9%).
Xbox Content and Services Revenue increased one percent compared to the same quarter a year ago. This was driven by growth in third-party content and Xbox Game Pass, partially offset by a decrease in third-party content. This is better than the forecast, which called for a decline of mid-single digit percentages (-4% to -6%).
Xbox hardware revenue fell 29 percent year over year due to lower console sales. No forecast was given for hardware. Microsoft did increase the price Xbox consoles in most regions on May 1 and second time in the USA on October 3.
For the quarter as a whole, Microsoft reported that revenue for the quarter rose 18 percent year-over-year to $77.673 billion, operating income increased 24 percent to $37.961 billion, and net income rose 12 percent to $27.747 billion.
“We have expanded our reach across all endpoints, focusing on high-value content and services,” said Microsoft CEO Satya Nadella. “We have launched critically acclaimed games such as Guardian, Ninja Gaiden 4And The Outer Worlds 2. Reaching 155 million monthly active users in Mining craftrecord high. And set a new record for total content and services revenue for the quarter.
“We also saw a great response to the launch of Xbox Ally two weeks ago. And set new records for PC players.”
Microsoft's guidance for the quarter ending December 31, 2025 assumes that Xbox content and services will decline in the low to mid-single digits. Xbox hardware is expected to decline.
Eternal and avid gamer, William D'Angelo was first introduced by VGChartz in 2007. After several years of supporting the site, he was hired as a junior analyst in 2010, worked his way up to lead analyst in 2012, and took over equipment evaluation in 2017. He expanded his involvement in the gaming community by creating content himself. YouTube channel And Twitch channel. You can subscribe to the author on bluesky.
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