Microsoft CEO emphasises Xbox is entering "one of [its] strongest first- and third-party line up in years"

Microsoft has exceeded first quarter expectations, reporting $92.3 billion in revenue with increases in net income and earnings per share.

Devices and consumer revenue declined 3% to $15.5 billion. Xbox content and services revenue decreased 2%, primarily due to lower third-party content and Game Pass performance.

Xbox content and services revenue was partially offset by growth in first-party content, while Minecraft experienced "all-time highs in both engagement and revenue."

Cost of revenue for the devices and consumer segment fell 8%, driven by "lower amortisation of intangible assets from the Activision acquisition" and a 14% decrease in hardware revenue.

Xbox contributed to a 3% reduction in operating expenses, "partially offset by continued investments in R&D compute capacity and talent."

"In Q1, Xbox revenue declined 2% YoY, compared with a 10% decline a quarter ago, while our accountability margin improved," said Xbox CEO Asha Sharma.

"Minecraft and World of Warcraft Forever set records, Call of Duty had its most acclaimed release in more than a decade, and our PC platform revenue grew double digits. Console sales remain constrained by supply, with more demand than consoles available."

"We're working to get more consoles into players' hands, including through our expanded refurbishment program. We're making progress, with a lot more work ahead.

For Q2, Xbox content and services revenue is expected to grow in the mid to high-single digits, "up sequentially driven by the timing of content launches across both third- and first-party," said Microsoft EVP and CFO Amy Hood.

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