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ProPakistani
Even Microsoft's Best Quarter Couldn't Save Xbox From Declining Revenue
Microsoft announced a strong fourth quarter, with total revenues up 18% and net income rising by 31%. However, its Xbox division faced stark declines, with content and services down 10% and hardware revenue dropping by 13%. The fiscal year saw a total decline of $1.7 billion or 7% in Xbox revenue, attributed to narrower investments and poor hardware sales. Layoffs and a restructuring plan aim to reinvigorate the Xbox brand long-term.
MonitorConfidence: MediumMid term horizonTalent displacement risk: High
Published 30 Jul 2026, 09:55 UTC2 min read
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Summary
TL;DR
- Microsoft posted a record $90 billion revenue in Q4.
- Xbox content revenue fell by 10%, hardware dropped by 13%.
- Overall Xbox revenue declined by $1.7 billion or 7% for the fiscal year.
- Major restructuring includes layoffs of 3,200 positions.
- Future console price increases planned for Xbox models.
Interesting facts
- Xbox Game Pass growth partially offset revenue declines.
- Microsoft is focusing more on major franchises like Fallout.
- CEO Asha Sharma highlighted resource spread as a key issue.