Xbox Revenue Slips 2% as Microsoft Says WoW Forever and Minecraft Set Records

Microsoft’s Xbox business dipped slightly in the company’s first quarter of fiscal 2027, with revenue landing at $5.379 billion for the three months ending September 30, 2026. That’s down 2% from $5.508 billion in the same period last year.

On its earnings call, Microsoft said Xbox content and services revenue also fell 2%, or 1% in constant currency. The company blamed the decline on lower third-party content and Xbox Game Pass revenue, partly offset by growth from Microsoft’s own games.

The quarter wasn’t all downbeat for Xbox. Microsoft CEO Satya Nadella said Minecraft hit all-time highs for both engagement and revenue, while World of Warcraft had the largest beta in the franchise’s history. World of Warcraft: Forever launches globally on November 4 at 3:00 p.m. PST.

Xbox CEO Asha Sharma said Minecraft and WoW Forever set records during the quarter, and added that Xbox revenue was down less sharply than the previous quarter, when it fell 10% year over year. She also said PC platform revenue grew by double digits, and that console sales are still being limited by supply, with demand outpacing available hardware. Microsoft is trying to ease that partly through an expanded refurbished console program.

Looking ahead, Microsoft expects Xbox content and services revenue to grow in the mid to high single digits in the December quarter, helped by the timing of first-party and third-party game launches. Hardware revenue, however, is expected to decline year over year.

Further reading: Official Microsoft FY27 Q1 earnings release