Xbox Revenue Declines for 4th Straight Quarter, Hardware Revenue Falls 13%

Key Points:

• Microsoft reported a decline in Xbox revenue for the fourth consecutive quarter, with total Xbox revenue falling to $4.98 billion in Q4 2026 from $5.53 billion a year earlier.
• Xbox content and services revenue dropped 10% year-over-year, slightly better than the forecasted decline of 11-13%, while Xbox hardware revenue decreased 13%, consistent with expectations despite recent price increases.
• For the full fiscal year 2026, total Xbox revenue decreased 7% to $21.79 billion, with content and services revenue down 5%, even as Microsoft's overall revenue and net income grew significantly.
• Microsoft CEO Satya Nadella emphasized ongoing efforts to reset the Xbox business for long-term growth, expecting a return to growth in fiscal year 2027, supported by strong intellectual property and talented studios.
• Xbox CEO Asha Sharma noted that while over 200 million new players joined Xbox in FY26, the business did not grow proportionally, and the company plans to invest in player-valued areas to close this gap by the end of FY27.