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Microsoft's Xbox Revenue Plummets Amid Game Performance Struggles

1/30/2026

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Summary

Story summary

Microsoft's Xbox division posted a 32% decline in hardware revenue in the last quarter of 2025.
Total games revenue fell 9% year-on-year due to disappointing first-party game performance.
Microsoft CEO Satya Nadella noted a 5% drop in Xbox content and services revenue.
Cloud services revenue rose to $51.5 billion.
Microsoft launched the ROG Xbox Ally handheld and is developing next-generation hardware to increase PlayStation 5 game availability.

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Story summary

Microsoft's Xbox division posted a 32% decline in hardware revenue in the last quarter of 2025.
Total games revenue fell 9% year-on-year due to disappointing first-party game performance.
Microsoft CEO Satya Nadella noted a 5% drop in Xbox content and services revenue.
Cloud services revenue rose to $51.5 billion.
Microsoft launched the ROG Xbox Ally handheld and is developing next-generation hardware to increase PlayStation 5 game availability.