Xbox FY26 Q1 gaming content and services revenue is up 1% year-over-year — thanks to growth in Xbox Game Pass and third-party content

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Microsoft announced its financial results for the first quarter of fiscal year 2026 on Wednesday. Revenue from Xbox content and services increased by 1% compared to the same period last year, reaching the end of September 2025. This slight growth, which exceeded expectations, was driven by gains in Xbox Game Pass and content from other companies, though partially offset by lower revenue from Microsoft’s own games. Xbox console sales, however, decreased by 29% year-over-year.

Overall, Microsoft reported $77.7 billion in revenue and $27.7 billion in net income for the quarter, representing an 18% and 12% increase, respectively, compared to the previous year.

A slower quarter in a strong year of games

Honestly, it didn’t really surprise me to hear Microsoft talk about a bit of a slowdown in their first-party game releases this quarter. Sure, we got *Grounded 2* in early access thanks to the awesome folks at Obsidian, and *Gears of War: Reloaded* was cool, but it just wasn’t as packed with big releases as other times of the year.

It’s hard to compare when you look at 2025, though! We’ve already gotten huge games like the *Oblivion Remastered* from Bethesda and *DOOM: The Dark Ages* from id Software. Plus, it’s been amazing to see games like *Forza Horizon 5* finally come to PlayStation – it’s great that more people can enjoy them!

I’m keeping an eye on this, though, because things are always changing!

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2025-10-30 00:09