Xbox FY26 Q1 gaming monetary outcomes

This web page was created programmatically, to learn the article in its unique location you possibly can go to the hyperlink bellow:
https://www.windowscentral.com/gaming/xbox/xbox-fy26-q1-earnings
and if you wish to take away this text from our web site please contact us

Microsoft shared its newest monetary outcomes on Wednesday, detailing the outcomes for FY26 Q1, whereas revealing that Xbox content material and providers income was up 1% year-over-year for the quarter ending Sept. 30, 2025.

Specifically, Microsoft credit development in Xbox Game Pass and third-party content material for the slight improve which beat expectations, noting that it was considerably offset by a decline in first-party content material.

As for consoles, Xbox {hardware} was down 29% year-over-year, which means general gaming income was down 2% year-over-year, with Microsoft noting that this got here compared to a powerful prior yr.

During the earnings name accompanying the monetary outcomes, Microsoft CEO Satya Nadella praised the Xbox division’s latest launch of a number of critically-acclaimed video games, together with Double Fine’s Keeper, in addition to praising the launch of the latest ASUS ROG Xbox Ally accomplice gadgets.

Overall, Microsoft reached $77.7 billion in income for the quarter and $27.7 billion in internet revenue for the quarter, up 18% and 12% year-over-year, respectively.

A slower quarter in a powerful yr of video games

Grounded 2 two kids riding on Ant "Buggies" — Grounded 2 launched in early access back in July. (Image credit: Windows Central)

Microsoft noting a decline in first-party content for the quarter isn’t surprising. While this period didn’t go without a game launch thanks to the prolific Obsidian Entertainment sending out Grounded 2 into early access (as well as The Coalition with a remaster via Gears of War: Reloaded) the quarter still paled in comparison to other periods of the year.

2025 has seen huge Xbox first-party games launch like Bethesda Game Studios’ The Elder Scrolls 4: Oblivion Remastered and id Software’s DOOM: The Dark Ages. Oblivion Remastered in particular has done quite well, and is currently the fifth best-selling game of the year in the U.S, per analytics group Circana.

That’s in addition to a flood of ports to PlayStation hardware that brought previously console-exclusive titles over such as Playground Games’ Forza Horizon 5.

What’s coming for the final quarter of the year?

An official screenshot of The Outer Worlds 2. — The impact of Obsidian Entertainment’s The Outer Worlds will be included in the next quarter. (Image credit: Xbox Game Studios)

Looking ahead, there’s a major mixture of things to look to, with several higher-profile first-party Xbox game launches closing out 2025, alongside a huge shake-up to Xbox Game Pass.

The Xbox division has multiple games that’ll be factored into the next quarter, including Obsidian Entertainment’s science-fiction role-playing game The Outer Worlds 2, as well as Activision’s Call of Duty: Black Ops 7. There are also some big third-party games, with Electronic Arts launching Battlefield 6 in October.

At the same time, next quarter will also include an Xbox Game Pass price hike on the highest tier, with the price of Xbox Game Pass Ultimate recently increasing 50% to $30 a month. How will the higher price play out compared to however many players may have downgraded to a lower tier (or unsubscribed entirely)? I don’t know, but I’m extremely curious to find out.

Microsoft expects revenue to decline in the low-to-mid single digits for Xbox content and services for the next quarter, though with continued subscription growth.

All of this also comes as recent reports indicate that the Xbox division is being tasked with reaching a 30% profit margin, a number that’s significantly higher than the average across the gaming industry.

I have to continually reiterate that it’s utterly disappointing to see a company raking in profits (not just overall revenue) that still sprints to lay off thousands of employees. Microsoft’s hardly unique here, with many other companies such as Amazon recently cutting deep into their workforces, but it remains depressing.