Xbox Annual Revenue Declines by 7 Percent Following Fiscal Year 2026

Microsoft has concluded its financial results for fiscal year 2026, ending on June 30. While Microsoft as a whole reported an overall increase in corporate revenue reaching $331.8 billion, its gaming division did not perform as well. Xbox revenue dropped to $21.79 billion for the year, marking a decline of 7 percent.

Revenue from console sales and other gaming hardware continued a sharp decline, plummeting by 29 percent. Meanwhile, revenue from Xbox gaming content and services decreased by 5 percent. Microsoft explained that this drop stemmed from weaker game sales from its internal studios compared to the previous year. However, growth achieved by Game Pass helped mitigate further losses.

During a conference call with investors and analysts, Microsoft CEO Satya Nadella expressed optimism that Xbox will perform better in the coming year. He believes that ongoing restructuring, which has already resulted in 1,600 layoffs and will lead to more reductions by summer 2027, will aid the division. Nadella stated that the company is making necessary decisions across its content portfolio, platform, and operations to reset the business for long-term growth.