Xbox Console Sales Fall 14% as Microsoft Points to Supply Shortages

What happened

Microsoft's gaming business shrank again in the first quarter of its 2027 fiscal year, which ended on September 30: Xbox revenue came in at $5.38 billion, down 2% from $5.51 billion a year ago, while Microsoft as a whole grew revenue by 19% to $92.3 billion. Content and services revenue fell 2%, and hardware dropped a bigger 14% on a lower volume of consoles sold. CFO Amy Hood said the overall Xbox decline was driven by third-party content and Xbox Game Pass, partly offset by growth in first-party games. Microsoft Gaming CEO Asha Sharma claimed console sales are being held back by supply, with demand currently outpacing the number of consoles available, and said Xbox is working to get more units out to players, partly through an expanded refurbishment program. She also noted the 2% decline is much smaller than the 10% drop a quarter earlier, that margins improved, that Minecraft and World of Warcraft Forever posted record results, that Modern Warfare 4 is Call of Duty's most acclaimed release in over a decade, and that PC platform revenue grew by double digits.

Impact and signal

Affected components and suppliers

Source and time

Source: TechPowerUp · 10/29/2026 · View original source