Overview
- Xbox content and services revenue rose 1% year over year, driven by Game Pass and third‑party spending and partially offset by a decline in first‑party content.
- Overall gaming revenue fell by $113 million, or about 2%, with hardware weakness outweighing modest services growth.
- Microsoft guided to continued declines in Xbox hardware revenue next quarter and only low‑single‑digit growth in content and services.
- The quarter landed between Xbox console price increases in May and October, and a Game Pass Ultimate price hike announced on October 1 will show up in future results.
- New Xbox‑branded handheld devices made by ASUS launched on October 16, with initial sales to be reflected in upcoming financials as Microsoft’s broader cloud and AI businesses drove strong companywide growth.