Microsoft Earnings for FY27 Q1 - Xbox Total Revenue -2%, Content & Services -2%, Hardware -14%

[trunkswd]

Hard to judge if any adjustments are needed based on how little information Microsoft provides, but right now here are our quarterly estimates:

• Sep 2025 Q - 481K
• Sep 2026 Q - 350K

That is a 27% drop in units year-on-year. However, the Xbox Series X and S is more expensive than a year ago. So the units sold having a bigger drop than revenue makes sense. 

In the US, the average selling price for Xbox was up 33% year-on-year in September, while August is likely similar with the price increase happening on August 1. How much it would be up in July would be a lot lower. Then you take into account the price increase was different in other parts of the world. Likely talking a 20%-25% increase in the average selling price compared to the same quarter a year ago.

As far as the continued Xbox declines. They do seem to be improving, even if numbers are still down. The 3 previous quarters: -10% for June 2026, -7% for March 2026, and -9% for Dec 2025. Still not great, but hopefully this means the declines will stop soon.

Last edited by trunkswd - 22 hours ago