Xbox hardware sales have dropped by 29%, resulting in about a $113 million decrease in revenue compared to last year. This follows a recent price increase for Xbox Game Pass in October, which sparked criticism from many users.
As a big Xbox fan, I’ve been a little worried lately. Even though games like Ninja Gaiden 4 and The Outer Worlds 2 have been great, things haven’t been smooth sailing for them. Seeing Game Pass titles get cancelled and even pulled from stores like Costco was a real bummer. Now, it looks like those issues are starting to show up in Microsoft’s overall earnings, with a reported 2% drop in revenue. It’s definitely a concerning time to be an Xbox enthusiast!
Microsoft Reports Notable Drop in Sales for Xbox Compared to Last Q1
Microsoft’s latest financial report for the first quarter of Fiscal Year 2026 (FY26) shows that Xbox revenue decreased compared to the same period last year. While Xbox generated $5.621 billion in revenue during the first quarter of FY25, it brought in $5.508 billion this quarter, representing a loss of approximately $113 million. Overall revenue dipped by 2%, which is a slight decrease but not a significant one. Microsoft acknowledged this decline in its official press release.
Xbox’s hardware sales dropped 29% due to fewer consoles being sold, the company reported. While revenue from Xbox content and services rose slightly by 1%, thanks to strong performance from Xbox Game Pass and games from other developers, this was partially balanced out by lower sales of games made by Microsoft themselves.
The 1% increase actually reflects a breakdown of performance between content/services and the physical hardware itself, giving a clearer picture of how each area is doing.
It’s still uncertain if Xbox can recover lost market share. Recently, they announced that the original Halo: Combat Evolved will be available on PlayStation, signaling a continued push to release games on other platforms. Xbox is aiming for a strong 2026 with new installments in popular franchises like Forza Horizon 6, Clockwork Revolution, and Fable. Whether these games will be enough to improve Xbox’s position remains to be seen, no matter how well-received they are.
Microsoft reported strong financial results, with operating income rising 24% to $38 billion and overall net income increasing by 12% to $27.7 billion. These are positive figures for the company.
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2025-10-30 00:48