Microsoft’s recent financial report for the second quarter of 2026 shows that its gaming business experienced a drop in revenue. Overall gaming income fell by 9%, with subscriptions and content like Game Pass declining by 5%. The biggest decrease was in hardware sales, which plummeted by 32%.
Microsoft’s total revenue decreased by 3%, but this was balanced out by strong performance in areas like search, news advertising, and Windows for computer manufacturers. Specifically, the end of support for Windows 10 helped boost Windows OEM and Devices sales by 1%.
Most of Microsoft’s revenue this quarter came from its productivity and business software, like Microsoft 365 and related cloud services. Revenue in this area increased by 17 percent overall.
It’s not surprising that Xbox Series X/S hardware sales have been down recently. Reports from December showed console sales in the US reached a record low, with a 70% decrease in sales between November 2024 and November 2025.
Xbox sales have been falling, and according to Circana analyst Mat Piscatella, a major reason is the rising cost of the consoles. Microsoft increased prices in September, with the Xbox Series X now selling for $599.99 and the 1 TB Xbox Series S for $429.99.
People planning to buy an Xbox might face another price increase. A recent report suggests Microsoft will raise prices again due to a global shortage of memory chips. According to tech YouTuber Moore’s Law is Dead, this would be the third price hike, and it’s happening because Microsoft didn’t anticipate the shortage of RAM.
He said it seems they didn’t prepare for this at all. If you’re still hoping to buy an Xbox, the price might increase or they could run out of stock quickly. He’s heard from multiple sources – sales representatives at Microsoft – that this is likely to happen with the Xbox Series consoles very soon, possibly even immediately.
Recent reports suggest that the new Xbox and PlayStation consoles, originally expected around 2027, might be pushed back due to a shortage of computer memory. Despite this, Xbox president Sarah Bond has hinted that the next Xbox will be a high-end device with a focus on quality, likely meaning it will be a more expensive console.
Microsoft is increasingly concentrating on gaming software. They’ve recently partnered with Asus to release the ROG Xbox Ally and Xbox Ally X handheld devices, and they’ve introduced a new Full Screen Experience for Windows 11 designed to make gaming easier without a mouse and keyboard.
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2026-01-29 15:44