XBOX Hardware Revenue Falls 14% as Game Pass Declines

XBOX hardware revenue fell 14% in Q1 FY2027, while content and services dropped 2% as Game Pass and third-party content revenue declined. Microsoft’s Q1 FY2027 report provides this year-over-year decline data. The first quarter of the fiscal year ending in 2027 ended on September 30, a month ago. Microsoft says declines in content and services revenue were driven by declines in third-party revenue and the Xbox Game Pass subscription model. However, it states that growth in first-party content revenue offsets these declines. XBOX has recently changed its approach to first-party offerings regarding console exclusivity.