Xbox Gaming Revenue Down 7 Percent Year-on-Year, Hardware Down 33 Percent

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Microsoft’s recent earnings report shows that several areas of its business that deal directly with consumers have experienced revenue declines. Gaming, in particular, has seen a 7% decrease in revenue compared to last year. Sales of Xbox consoles have dropped significantly, falling by 33%.

Xbox revenue decreased by 5% compared to last year, but Microsoft explains this was due to a particularly strong year for its games in the previous period. Similarly, Windows revenue from device manufacturers and sales fell by 2% compared to the year before.

Microsoft’s January earnings report showed a 9 percent drop in overall gaming revenue. Hardware sales were particularly weak, falling by 32 percent. While Xbox contributed to a 3 percent decrease in total revenue, this was balanced out by gains in other areas of the business.

The upcoming earnings report probably won’t reflect any changes from Microsoft’s recent rebranding of its gaming division to Xbox, or the new CEO, Asha Sharma. Since becoming CEO, Sharma and content chief Matt Booty have emphasized their commitment to making the Xbox platform accessible to more creators.

In a recent interview, Sharma explained that as they develop new devices, software, and services, they are equally focused on delivering a great user experience and keeping costs down. While he wouldn’t commit to specific prices, he emphasized their commitment to making their products accessible to people globally, ensuring everyone has the opportunity to enjoy them.

Sharma also mentioned that the global shortage of memory chips could affect Microsoft’s plans for its next Xbox console, currently known as Project Helix.

She explained that several factors are at play. The cost of components will affect how much the console costs and how many will be available. As we aim to be a leading gaming platform, we’re carefully considering all of this, which is why we can’t announce a release date yet, given the current unpredictable global situation. Right now, our priority is to focus on what we can control – creating a fantastic console and ensuring it offers access to a wide range of games, including those you already play on PC.

Microsoft is reportedly considering bringing back games that are only available on Xbox, as part of an effort to increase profits from its gaming business. These discussions were recently revealed in industry rumors.

The recent price drop for Game Pass could boost the company’s earnings when they report them next. Plus, with new Call of Duty games no longer launching directly on the service, traditional game sales are expected to become more important for revenue by the end of the year.

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2026-04-30 16:41