Microsoft reported its financial report for the first quarter of fiscal 2027, and it was mixed for Xbox.Content and services revenue fell 2 percent year over year and console sales fell 14 percent, but the pace of decline slowed and margins improved.
Quarter numbers
Xbox's revenue from content and services, which is games, add-ons and subscriptions, fell 2 percent.The decline was recorded in the partner content segment and in Game Pass, partly offset by the growth of internal studios.Console sales were down 14 percent.Microsoft's operating expenses fell 3 percent, led by its Xbox division.
Words from the head of Xbox
Asha Sharma recalled that the division's revenue fell by 10 percent a quarter earlier, so the dynamics have improved.According to her, Minecraft and World of Warcraft showed record numbers, and the new Call of Duty became the highest-rated game in the series over the past decade.We wrote more about the series' revenue separately.PC revenue grew at double-digit rates.
Console sales, Sharma explained, are limited by supply: demand outstrips the number of units available.To get consoles into the hands of more players, Microsoft is expanding its refurbished device sales program.Her conclusion is this: there is progress, but there is still a lot of work ahead.Previously, Satya Nadella expressed confidence that Xbox would return to growth before the end of the 2027 fiscal year.
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