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Microsoft Earnings Release FY26 Q1

- 29% revenue down.

+ 30% profit margin.

= 1% increase.

That's how the number works out, right?



Smart Genius GIF by YoungerTV
 
lastmessiah said:
You guys are really obsessed with MSFT financials.
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It's not about MS. The whole Gaming subforum focuses more on the business side of things than on games. Which is odd but also understandable, given all the financial pressures and problems across the gaming world right now and the relative lack of interesting games to talk about.

I'm not criticizing. I find the business side of gaming more interesting than the gaming side of gaming myself, at least lately.

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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It's understandable if you put yourself in the shoes of a diehard Xbox fan and widen out the context. It's not about this one report. It's about Xbox taking punch after punch, one after another, for years.

And let's be honest, plenty of PS guys do point and laugh. Hell, I'm one of them. :messenger_grinning_smiling: But if you put yourself in the shoes of a hardcore Xbox fan -- the kind of guy who is still hanging on after all this -- then it has to feel like piling on.
 
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Humdinger said:
It's not about MS. The whole Gaming subforum focuses more on the business side of things than on games. Which is odd but also understandable, given all the financial pressures and problems across the gaming world right now, and the relative lack of interesting games to talk about.

I'm not criticizing. I find the business side of gaming more interesting than the gaming side of gaming myself, at least lately.
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The business side of gaming is just as important as the games itself. Business trends usually tells us, what games are going to get made.
 
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Humdinger said:
It's not about MS. The whole Gaming subforum focuses more on the business side of things than on games. Which is odd but also understandable, given all the financial pressures and problems across the gaming world right now and the relative lack of interesting games to talk about.

I'm not criticizing. I find the business side of gaming more interesting than the gaming side of gaming myself, at least lately.



It's understandable if you put yourself in the shoes of a diehard Xbox fan and widen out the context. It's not about this one report. It's about Xbox taking punch after punch, one after another, for years.

And let's be honest, plenty of PS guys do point and laugh. Hell, I'm one of them. :messenger_grinning_smiling: But if you put yourself in the shoes of a hardcore Xbox fan -- the kind of guy who is still hanging on after all this -- then it has to feel like piling on.
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They should be honest with themselves. I'm a fan as well but this shit has been festering for years and if they're pissed pff then look to the people who are being paid considerably to supposedly manage Xbox or the slimeballs who are supposedly journalists telling tales of excellence when it's the opposite.
 
Klayzer said:
The business side of gaming is just as important as the games itself. Business trends tells what games are going to get made.
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I understand that and agree. As I said, I was not being critical. I understand why people are more interested in the business side of gaming than in the games themselves. Sometimes I get disgruntled about this -- I think we should be talking more about games, less about business -- but I find myself more drawn to the latter myself, so I can't complain. I was just explaining the context to the guy complaining. It isn't about MS. It's about the forum's focus on business.
 
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Humdinger said:
I understand that and agree. As I said, I was not being critical. I understand why people are more interested in the business side of gaming than in the games themselves. Sometimes I get disgruntled about this -- I think we should be talking more about games, less about business -- but I find myself more drawn to the latter myself, so I can't complain. And it's an interesting time, business-wise.
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It's not exclusive to games. Enthusiasts in any space talk the business side because it has a direct impact on future products and strategies. Table top, movies, etc.
 
Humdinger said:
I understand that and agree. As I said, I was not being critical. I understand why people are more interested in the business side of gaming than in the games themselves. Sometimes I get disgruntled about this -- I think we should be talking more about games, less about business -- but I find myself more drawn to the latter myself, so I can't complain. I was just explaining the context to the guy complaining. It isn't about MS. It's about the forum's focus on business.
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No problem. I often think as we age, we tend to discuss business more, because of the interest in financial matters. My take on it, at least.
 
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Kacho said:
It's not exclusive to games. Enthusiasts in any space talk the business side because it has a direct impact on future products and strategies. Table top, movies, etc.
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Sure. The business of gaming impacts gaming. I get that. I don't remember it being this lopsided in the past, though, where discussions about business dwarf discussions of games. Again, not complaining/judging, just describing. With Xbox cratering, it's an interesting time business-wise, and there isn't a lot to talk about in terms of games, so it's understandable.

p.s. It occurs to me that it isn't true of all enthusiast spaces. My other hobby is reading. Most people interested in books talk about books, not about the business of books. Yes, there is some discussion of the business of publishing - sales numbers and so forth - but they are a sideline. Most people who love books aren't talking about the business; they are talking about their experience of reading books.
 
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Content and Services expected to decrease low to mid single digit %
Hardware to further decline, no % provided
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So expecting decline on hardware and C & S, during BO7 launch.
Not sure how much further hardware can decline though.
 
Mr Moose said:
So expecting decline on hardware and C & S, during BO7 launch.
Not sure how much further hardware can decline though.
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That's the magic of percentages.....

Without the real number of units sold, they don't tell the whole picture

But we know Series consoles are selling less than Switch 1 already
 
Kacho said:
Why is everyone rooting for Xbox to fail? You must hate gaming.
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Not rooting, but it is satisfying to see how the plans of the "Suits" failed.
I don't want that the Xbox brand disappear and nor their IPs.
I don't even blame Phil Spencer.
Don Mattrick failed as the CEO of MS gaming and destroyed the brand with the One and many wrong decisions.
Phil tried his best, but the damage was irreparable.
 
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As with any hobby, you love the actual hobby but you are very interested also in the business side of things because that is what will determine the future, what ganes are being made, if the developers and games you love are viable and sustainable..

Take sports, for example. You may love the game, football/soccer, basketball, Baseball.. but you are also mad interested in the economics behind because that will determine wich club will be able to invest getting the best new players etc. So you follow if your club signs new economic deals that strengthen its economic power, and also with rivals.
 
Hector Hall said:
As with any hobby, you love the actual hobby but you are very interested also in the business side of things because that is what will determine the future, what ganes are being made, if the developers and games you love are viable and sustainable.
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Yes, some interest is natural, but I was talking about the proportion. Business talk tends to dominate, with talk about games being a smaller sideshow. It's the reverse in most of the hobbies I've been involved with. Reading, for instance. Most people who are interested in books talk about the books. There is some talk about the business and sales, but it isn't the main focus. The main focus is books. Hiking would be another hobby of mine. I don't see hikers talking much about the business of hiking and who's selling the most backpacks. They're talking about their experience of hikes. It's the reverse here.
I wonder if some of it has to do with the games themselves not being all that interesting. Except for occasional outliers (e.g., Expedition 33), games don't seem to capture people's imagination and attention the way they used to. I often look around for interesting games to talk about, and I can't find any.

I also assume some of this relates to the current Xbox situation. That is probably keying people up to care more about business news than usual. I think part of it is the console war drama.

Anyhow, carry on. I'm not here to cast stones. I get drawn to these threads, too.
 
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Kacho said:
FY26 Q2 Forecast
  • Content and Services expected to decrease low to mid single digit %.
  • Hardware to further decline (no % provided).
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My God man. So they are either seeing lower COD pre-orders, many people canceling GP, The Other Worlds 2 is tracking behind Indiana Jones game (which is hard to believe), or some mixed combination of the above.

Otherwise, that doesn't make sense.
 
Kacho said:
FY26 Q2 Forecast
  • Content and Services expected to decrease low to mid single digit %.
  • Hardware to further decline (no % provided).
Click to expand...
Forecast vs this quarter or the same quarter last year. Because those are two very different things.
 
Jaybe said:
Yeah, I guess +1% for content is technically growth but I'm sure Amy isn't pleased
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Well setting aside the hardware crater, this 1% has come after releasing several big hitting Xbox games on other platforms with healthy sales it seems - PS5 mainly.

Without those PS sales, the GP and Xbox storefront revenues from other sources would be 0% growth or a decline you'd have to imagine.

Which to me says there's no way they're getting to 30% without ... well longer topic, but extreme measures lets say.
 
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Three said:
Isn't it a YOY forecast? So they had COD releasing last year too but they are seeing no growth there, maybe even an expected decline.
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To me it feels like it's probably due to the total number of Game Pass subscribers decreasing overall. Because it's hard to accept there's that many less people pre-ordering Call of Duty this year compared to last year.

And there's just no way Microsoft flight simulator 2024 sold more than every Xbox game selling today on PlayStation 5 combined this holiday quarter.
 
mckmas8808 said:
To me it feels like it's probably due to the total number of Game Pass subscribers decreasing overall. Because it's hard to accept there's that many less people pre-ordering Call of Duty this year compared to last year.

And there's just no way Microsoft flight simulator 2024 sold more than every Xbox game selling today on PlayStation 5 combined this holiday quarter.
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Keep in mind that they had a price hike last year right at the beginning of this quarter and saw only a 1% growth in content and services while going third party and apparently "dominating" the charts on other platforms. so absolutely, very likely that subscribers decreased since last year.

I'm just pointing out that COD released last year too and their forecast is based on year on year as far as I know. So no growth is expected from it regardless because COD release happened last year too. COD this year is expected to perform worse than last year as well though if I had to guess.
 
Looking forward to the Destin video covering the Windows Central article on how all this is a sign of progress and a galaxy brain chess move by Microsoft in their battle against TikTok.
 
Magic Carpet said:
Anyway, after seeing the ROG in action with that XFSE I'm not so upbeat on the future of what you have going on there.
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Have you got your device now?
It took me one hour to swap over to Playnite. MS hasn't even started cooking yet and they still thought it was a good idea to hype it up and serve the dish. Incompetence.
 
Hardware also declined by 29% this quarter last year.

Stacking them both together, basically it's a 50% drop in hardware compared to 2023.
 
mckmas8808 said:
To me it feels like it's probably due to the total number of Game Pass subscribers decreasing overall. Because it's hard to accept there's that many less people pre-ordering Call of Duty this year compared to last year.

And there's just no way Microsoft flight simulator 2024 sold more than every Xbox game selling today on PlayStation 5 combined this holiday quarter.
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Keep in mind according to Tom Warren he mentioned on the Xbox era podcast that Pre-order numbers are down. That Battlefield 6 had Activision shook and was the reason to the changes being made such as the removal of SBMM.
 
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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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.
Click to expand...
Last I heard Microsoft is worth 4 trillion, which means Microsoft could give a $5000 check to every man, woman, and child in the United States, and still be worth over 2 trillion.
 
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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Time to fire all the xbox CEO's including pinocchio phil, dei sara and big booty matt, that would definitely make some srs saving/increase profitalibility way more than constant waves of layoffs at devteams...
 
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Next year will be the one for Xbox , I'm sure.
Their 25 year old single player Halo campaign remake will shatter sales records on Playstation.
All of GAF will pee out of their butts.
 
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Topher said:
So hardware losses are killing revenue growth
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But helping with profits, they even mention it as a factor in OI increase

Jaybe said:
Yeah, I guess +1% for content is technically growth but I'm sure Amy isn't pleased
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Their target now not a revenue growth for sure

brutz said:
Last I heard Microsoft is worth 4 trillion, which means Microsoft could give a $5000 check to every man, woman, and child in the United States, and still be worth over 2 trillion.
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Worth X money and having X money are different things
MS doesn't own a cent (besides some treasury shares) of those 4trln, it's all in the head of stock holders. Their retained earnings is only around 250 bln.

There funny stories how some garage small business was valued in tens of millions out of some stupidity of the market
 
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