Xbox: everything we know so far

Xbox hardware revenue took a 33 percent hit, even as the company raked in $82.9 billion. Xbox has emerged this Friday as one of the stories drawing attention in Japan.

Key facts

• Xbox hardware revenue took a 33 percent hit, even as the company raked in $82.9 billion.
• Xbox hardware revenue fell by over 30% for the second quarter in a row and for the third straight quarter this fiscal year.
• Update 29/04/2026: Following the publication of the earnings and this article, Xbox CEO Asha Sharma commented on the revenue decline, saying the division knows "we have work to do to earn every player today and into the future.
• “A Missed Opportunity for Xbox” — The Man Who Built ESO for 18 Years Opens Up About Project Blackbird’s Cancellation.
• Microsoft’s Xbox hardware revenue continues to tumble, with the company revealing a 33 percent decline as part of its earnings report released on Wednesday.

What we know

Going deeper, Xbox hardware revenue fell by over 30% for the second quarter in a row and for the third straight quarter this fiscal year.

On the substance, Update 29/04/2026: Following the publication of the earnings and this article, Xbox CEO Asha Sharma commented on the revenue decline, saying the division knows "we have work to do to earn every player today and into the future.

Beyond the headlines, Microsoft’s Xbox hardware revenue continues to tumble, with the company revealing a 33 percent decline as part of its earnings report released on Wednesday.

More precisely, Along with declining Xbox hardware revenue, Microsoft reported a 5 percent drop in Xbox content and services as well.

It is worth noting that Microsoft’s Xbox mode is now available for all Windows 11 PCs.

By the numbers

“A Missed Opportunity for Xbox” — The Man Who Built ESO for 18 Years Opens Up About Project Blackbird’s Cancellation.

On a related note, On April 29, 2026, local time, Microsoft announced its financial results for the third quarter of fiscal year 2026 (January-March).

Going deeper, Windows OEM and device revenue decreased 2% year-over-year, Xbox content and services revenue decreased 5% year-over-year, and search advertising revenue, excluding traffic acquisition costs, increased 12% year-over-year.

On the substance, Microsoft is doing well with net profit up 47%, Xbox recording sales up 172%, Windows up 7%, Surface down 20%, sluggish.

The wider context

On a related note, In particular, Microsoft Azure, Microsoft's cloud business, performed well, but Xbox-related sales recorded a decrease compared to the same period last year.

Going deeper, Microsoft's revenue exceeded 7 trillion yen, up 7% year-on-year & net profit increased 9%, while hardware sales such as PC and Xbox decreased 30%.

On the substance, Microsoft's third-quarter 2022 sales were up 18% year-on-year to $ 49.4 billion, Office 365 was up 17%, and Xbox was up 14%.

Beyond the headlines, Microsoft is up 14% year on year in the second quarter of 2020 due to strong performance of Office related and Azure etc., Xbox continues to struggle.

More precisely, Xbox content and services revenue declined 5% (7% CC) on a prior year comparable that benefited from strong first-party content performance," the report reads.

The bottom line

• That's three quarters of decline in a row for the Xbox division, after the first quarter saw a decline in the October 2025 report, and the second quarter report in January 2026 reported a decline.
• It's also two quarters back to back where Xbox hardware revenue fell by more than 30%.
• It would've been three straight quarters, but the first quarter decline for Xbox hardware only took a 29% dip.