'We Expect to Return to Growth' — Xbox CEO Remains Optimistic Despite Continued Revenue Loss Driven by Low Hardware and Content Sales
- Xbox reported a $1.7 billion revenue decline in FY26, driven by a 29% drop in hardware sales as console volumes fell sharply. The Form SEC filing confirms the company experienced notable revenue loss at fiscal year-end.
- Microsoft CFO Amy Hood reported that Xbox content and services revenue decreased 10% against a prior year that benefited from strong first-party performance. This decline reflects reduced software momentum compared to the previous period.
- Operating expenses increased 8% and 7% in constant currency, driven by investments and "impairment charges," Hood noted. Operating income fell 14% and 15% in constant currency, with margins declining to 21%.
- Xbox CEO Asha Sharma acknowledged the results, noting that over 200 million new players in FY26 failed to drive business growth. She expects the company to return to growth by FY27.
- Microsoft CEO Satya Nadella said the company is making necessary decisions across its content portfolio, platform, and operations to "reset" the business for long-term growth. Nadella believes Xbox can return to growth in Fiscal 2027.
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34 Articles
Xbox CEO lays out priorities in memo after major ‘reset’
Asha Sharma. | Image: The Verge, Microsoft After a massive Xbox "reset" that laid off thousands of employees and spun off four studios, Xbox CEO Asha Sharma wants to get Xbox back to growth. In a memo obtained by The Verge, Sharma told staff by the end of fiscal year 2027 (which runs through next June), "we will return XBOX to player and revenue growth." Xbox will also "improve profits back in line with industry averages," Sharma said. "Every f…
Xbox keeps sinking while Microsoft's AI business keeps soaring
While Xbox's 13% YoY drop in hardware revenue is not as bad as last quarter's 33% plummet, it still caps off a full year of uninterrupted declines. Price hikes and worrying PR surrounding the brand are likely the primary factors, and the situation is expected to worsen when Xbox Series...Read Entire Article
Following negative financial report, Xbox wants pay more attention to 'what players value'
If anyone needed more confirmation that Xbox is not in a good place right now, the financial report for the final quarter of this fiscal year makes it brutally clear. Although Microsoft's overall revenue has increased, the company's latest fiscal report reveals a significant decrease in Xbox services and content sales for the fourth quarter of 2026.
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