Microsoft shared its latest financial results on Wednesday, detailing the results for FY26 Q1, while revealing that Xbox content and services revenue was up 1% year-over-year for the quarter ending Sept. 30, 2025.
Specifically, Microsoft credits growth in Xbox Game Pass and third-party content for the slight increase which beat expectations, noting that it was somewhat offset by a decline in first-party content.
As for consoles, Xbox hardware was down 29% year-over-year, meaning overall gaming revenue was down 2% year-over-year, with Microsoft noting that this came in comparison to a strong prior year.
During the earnings call accompanying the financial results, Microsoft CEO Satya Nadella praised the Xbox division's recent launch of several critically-acclaimed games, including Double Fine's Keeper, as well as praising the launch of the recent ASUS ROG Xbox Ally partner devices.
Overall, Microsoft reached $77.7 billion in revenue for the quarter and $27.7 billion in net income for the quarter, up 18% and 12% year-over-year, respectively.
