MSFT · 10-Q · 2026Q1 · Full report

Gaming and Hardware Decline

MICROSOFT CORP · 2026-04-29 · Importance 40 · Surprise 56 · From source text

Gaming revenue declined, with a $380 million (7%) quarterly decrease driven by lower Xbox content and services and a 33% decline in Xbox hardware revenue due to reduced console volumes. For the nine months, Xbox hardware revenue decreased 31% and Xbox content and services also declined versus a prior-year comparable that benefited from strong first‑party content. The decline in hardware volume materially reduced Devices sales within More Personal Computing and contributed to an overall slight revenue decrease in that segment. Microsoft cites impairment and related expenses in Gaming as drivers of higher operating expenses in the segment.

Key facts

• Revenue for the More Personal Computing segment for the three months ended March 31, 2026 was $13,192 million, a (1)% decrease from $13,371 million. source
• More Personal Computing gaming hardware revenue (Xbox hardware) decreased 33% in the three months ended March 31, 2026 driven by lower volume of consoles sold. source
• Cost of revenue for the More Personal Computing segment decreased $584 million or 10% in the three months ended March 31, 2026 primarily driven by lower hardware sales. source
• Gaming revenue decreased $380 million or 7% in the three months ended March 31, 2026 driven by declines in Xbox content and services and Xbox hardware. source
• Xbox content and services revenue decreased 5% in the third quarter of fiscal year 2026. source

Impact estimates