Following the quarterly annual earnings report of Xbox, Microsoft CEO Satya Nadella has addressed the ongoing restructuring process in their gaming division and expressed his enthusiasm on the brand’s future during the company’s earnings call. And based on 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.
However, despite a tough year for Xbox, Microsoft’s total revenue has actually increased to 31.34% year-over-year to $133.75 billion.
And on the recent earnings call, CEO Satya Nadella has referred to the ongoing ‘Reset’ process in Xbox as necessary for ensuring long-term growth, while also praising the overall catalogue of titles and IPs, studios and the talented staff at work.
“Let me talk about devices and consumer.
When it comes to XBOX, we are making the necessary decisions required across our content portfolio, platform, and operations to reset the business for long-term growth.
We have the best IP in the industry, and talented studios around the world, and believe we can bring these strengths together and expect to return the business to growth in fiscal 2027.”
In response to the declining numbers, Xbox CEO Asha Sharma has also 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.
