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Microsoft Earnings Release FY26 Q1

FalsettoVibe said:
Who's rooting for them to fail? Is there a tinge of negativity? Yeah. But then again, GAF can be a bit negative about everything.
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reinking said:
I am not rooting for it. I also do not root for accidents on the highway, but it does not stop me from slowing down and looking at the carnage.
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I'm channeling big papi
Gonzito said:
It's honestly sad to see how some people here seem to root for games to fail and studios to crash.

I'm not even a big fan of Obsidian, but come on boys, it seems like you don't appreciate games or gaming in general with this attitude
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Wg1BDUp.png


Xbox Quarterly Results | Q1 FY2026

▪️Content and Services went up +1%
▪️Xbox hardware dropped -29%
▪️Total Gaming Revenue decreased -2% ($113M)

With Xbox hardware dying so quickly, it cannot compensate with games and services and its total revenue drops by 2%.
 
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29% hardware decline is actually good because that means there was some hardware to decline to in the first place, I don't know for how much tho.
 
The hardware decline is less than I expected, but all the news of stores removing hardware etc. are very recent. I wonder what the next quarter will look like.
 
mayham2199 said:

FY26 Q1 - Press Releases - Investor Relations - Microsoft

FY26 Q1 - Press Releases - Investor Relations - Microsoft
www.microsoft.com

  • · Windows OEM and Devices revenue increased 6%
  • · Xbox content and services revenue increased 1% (relatively unchanged in constant currency)
  • · Search and news advertising revenue excluding traffic acquisition costs increased 16% (up 15% in constant currency)

1% is pretty good.
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Nadella looking at Spencer leaving the meeting.

tenor.gif
 
Horseganador said:
Wg1BDUp.png

As expected, Xbox hardware will fall even further, while services and software will remain more or less the same.
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Thanks. This answered my question back on the last page.

This is why I don't share anyone's optimism about the supposed Magnus hybrid console-PC. Xbox brand's mindshare is in the absolute trash even in its largest markets and there's still at least two years before the Magnus hardware is a reality. By the time whatever Magnus is comes out, Xbox will be almost entirely associated solely as a software and Game Pass company, not a hardware one. There's (most likely) going to be another 8 quarters of hardware declines between now and then and then they're going to pop up like a jack-in-the-box and say: "Hey guys, wanna buy this $1200+ PC/Console Xbox?"

That's assuming it actually ends up happening and isn't canned by the highest of the higher ups who is yelling at TikTok.
 
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  • · Revenue was $77.7 billion and increased 18% (up 17% in constant currency)
  • · Operating income was $38.0 billion and increased 24% (up 22% in constant currency)
  • · Net income, on a GAAP basis, was $27.7 billion and increased 12%
This thread is about Microsoft.
 
Jaybe said:
Total Microsoft Gaming is down -2% with hardware and content combined

JDMfA95O1sQHLBaI.jpeg
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Xbox hardware being pretty much dead is no surprise but even their first party sales are trending down so they're not managing their studios well.
And next quarter things might get ugly with the next COD rumored to be underperforming.
 
Techno_Inked said:
It's actually worse than you think.
The 30% Microsoft mandate is based on profits, not revenue.
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??
It's easier to make a profit when you reduce costs. Each console you sold generated revenue, yes, but also manufacturing costs that exceeded that revenue.

It is easy to understand their strategie to increase profit margins. Minimize the items that generated losses (in this case, hardware).

Then, the 1% is good news in so far as it's more than they themselves predicted.

Previous Guidance for Q1:Total decline mid to high single digits (4-9%) "against a strong prior year comparable"



Content and Services to decline in mid single digits (4-6%)
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And this same quarter was very strong in terms of software revenue last year, and today one has matched or even surpassed it despite a 29% drop in hardware revenue.

It will be interesting to see their forecast for the next quarter with Call of Duty, several first-party releases, and the Christmas season.
 
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Skifi28 said:
The hardware decline is less than I expected, but all the news of stores removing hardware etc. are very recent. I wonder what the next quarter will look like.
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The decrease in hardware is in "revenue", not units. So this includes the first price increase of $100. But not the 2nd increase that happened this October.
 
Elios83 said:
And next quarter things might get ugly with the next COD rumored to be underperforming.
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They are defintley a bit spooked with early reception.

They've been stubborn about removing/toning down sbmm even going as far as to release some papers explaining how it works to dispel rumors.

I can see that single game underperforming really fuck things up for the whole division.

They are expecting a content and services decline this quarter aswell even with COD.
 
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mckmas8808 said:
The decrease in hardware is in "revenue", not units. So this includes the first price increase of $100. But not the 2nd increase that happened this October.
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Next quarter it will be worse than -29%

Those consoles are disappearing from retail while their price got higher

=

Nobody is going to buy their dead products in the final 3 months of the year
 
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  • Jack your hardware prices sky-high.
  • Jack your service prices sky-high.
  • Fire thousands of employees.
  • Force remaining employees to rely on AI.
  • Release few new or interesting games.
  • Release your games on other platforms.
  • Change strategy once every three months.
  • Business completely stagnates.
Oddly enough, I'm familiar with this particular business strategy. It's an old Japanese strategy called "Kamikaze". Microsoft's innovation on that strategy appears to be to target one's self. It's a bold strategy - let's see how it plays out.
 
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mayham2199 said:
I created the thread to talk about Xbox and the gaming division. I don't give a shit about Azure.
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Yet you're including devices and Windows search results while naming the thread Microsoft financials, if you want to talk about Xbox name it Xbox don't cherry pick their poorest results across the company.

RetroGamingUK said:
Forza Horizon 5 on PS5 doing the legwork.
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It's been solid as fuck, I'm really disappointed they're not doing FH6 day and date. Would see the largest racing launch in history.
 
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The interesting report will be the following: with the price increase of Game Pass, the real competition is TikTok, exclusives aren't important, Gears, Forza, and Halo are now on PS5, we're laying off hundreds of employees and replacing them with AI, demanding 30% profits, hardware down 29%, etc., etc., etc.
 
mckmas8808 said:
This is getting weird. We've seen some of this on GAF today too. And in this very thread. WTH is happening to people getting mad at others just reporting the news of Xbox?
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They're back into the anger phase of the cycle again. MS won't ever let them get out. They bargain, then back to anger. It's their evangelical purgatory.

RKc9kc2hONaF6Ing.jpeg
 
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