Overview
- Microsoft’s July 29 earnings showed Xbox content and services revenue fell about 10% in the quarter while Xbox hardware revenue declined 13–14%.
- For the full fiscal year Microsoft said Xbox revenue dropped roughly $1.7 billion, or about 7 percent, driven by lower game, subscription and console sales.
- Xbox boss Asha Sharma is carrying out a declared “reset” that includes roughly 1,600 planned layoffs and the sale of four game studios to focus investment on major franchises.
- Microsoft will raise retail prices for its consoles starting August 1, 2026, and continues work on next‑gen Project Helix while reporters say the company still loses money on some console units.
- At the same time Microsoft’s cloud revenue rose about 27% and productivity revenue climbed about 14%, a surge that the company is using to fund large AI and hyperscaler infrastructure investments and that helps explain the reallocation of resources away from gaming.