According to the latest Earnings Report from Microsoft, the total revenue of Xbox has sharply declined in the last quarter, by 10% from the same quarter a year earlier. Moreover, hardware revenue has also decreased by 13% in the quarter along with total-year revenue of Xbox down by 5% compared to the previous year. As outlined by Microsoft’s Form 10-K SEC filing, Xbox’s revenue has decreased by $1.7 billion, or 7%, mostly caused by declines across Xbox contents, online services and hardware.
To go into more detail, total commercial revenue for Xbox content and services is lower by 5%, while hardware revenue has decreased by 29% due to lesser volume of consoles being sold worldwide.
Microsoft CFO Amy Hood stated the following (via PlayDayOne) during a shareholder meeting that took place yesterday, “Xbox content and services revenue decreased 10% against a prior year comparable that benefited from strong first party performance.”
Hood also mentioned that operating expenses for Xbox had increased up to 8% and 7% in continuous currency mainly due to investments in the company’s R&D and “impairment charges”, while operating income has decreased to 14% and 15%, with operating margins declining year over year by 21%.
“In Xbox content and services we expect revenue to decline in the mid-single digits. Hardware revenue should decline year over year,” she said.
And in response of the decreasing numbers, Xbox CEO Asha Sharma released a public statement on X/Twitter, providing an optimistic outlook on the earnings report:
“In FY26, over 200 million new players came to Xbox and our games, but our business did not grow with our audience. We need to close that gap by investing in what players value. That will take time, but we expect to return to growth by the end of FY27,” Sharma wrote.
The revenue numbers hit amid the ongoing massive restructuring process across Xbox which has resulted in mass layoffs and has seen a total of 1600 staff losing their jobs two weeks back and 3200 employees scheduled to be let go by the end of the current fiscal year.
