Xbox Revenue Declines for 4th Straight Quarter, Hardware Revenue Falls 13% - Sales
by William D'Angelo , posted 4 days ago / 6,207 Views
Microsoft has released its earnings report for the fourth quarter of the 2026 fiscal year, which ended up June 30, 2026.
Total Xbox revenue was $4.98 billion for the quarter, which is down from $5.53 billion in the same same period a year ago. This is the fourth quarter in a row Xbox revenue has declined.
Xbox content & services revenue decreased 10 percent compared to the same quarter a year ago. This is slightly better than the forecast, which expected a decline in the low teens percent (-11% to -13%). Microsoft stated the prior year "benefited from strong first-party content performance."
Xbox hardware revenue dropped 13 percent year-on-year. This is inline with the forecast, which was for a decline. Microsoft did increase the price of Xbox consoles in most regions on May 1, 2025 and a second time in the US on October 3, 2025. The price is set to increase again on August 1.
For the fiscal year, total Xbox revenue decreased seven percent to $21.79 billion. Xbox content & services revenue decreased five percent year-on-year.
Overall for the quarter, Microsoft reported for the quarter revenue was up 18 percent year-over-year to $90.0 billion, operating income increased 18 percent to $40.6 billion, and net income on a GAAP basis was up 31 percent to $35.8 billion.
For the fiscal year, Microsoft revenue for the full fiscal year increased 18 percent to $331.8 billion, operating increased 21 percent to $155.2 billion and net income on a GAAP basis was up 31 percent to $133.7 billion.
"When it comes to Xbox we are making the necessary decisions required across our content portfolio, platform, and operations to reset the business for long term growth," said Microsoft CEO Satya Nadella.
"We have the best IP in the industry and talented studios around the world and believe we can bring these strengths together and expect to return the business to growth in fiscal [year] 2027."
Xbox CEO Asha Sharma stated, "In FY26, over 200 million new players came to Xbox and our games, but our business did not grow with our audience. We need to close that gap by investing in what players value. That will take time, but we expect to return to growth by the end of FY27."
Microsoft's forecast for the quarter ending September 30, 2026 expects Xbox content & services to decline in the mid single digits percent (-4% to -6%) year-on-year. Xbox hardware is expected to decline.
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can follow the author on Bluesky.
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200million new xbox players hahaha yea right!!
That figure includes all of Xbox's properties, including Minecraft and KING mobile games (Candy Crush, etc.)
Oooo..
I believe it. The funny thing is, is it makes things sound really bad. You get so many new players and business shows no growth? That's horrible.
good news, a leading microslop is the death of gaming
fraudsters want to pretend we don't need steam
no, brother, we don't need microslop
Microslop has never been leading. Xbox isn't even a direct competitor per se. MS makes and funds games that often find their way on Steam, they have a good subscription service (Game Pass) and they offer cloud gaming.
For the most part, Valve is just a game store. A great one, but not much more than that.
Activision Blizzard King purchasing price sounds like child's play when Microsoft does a net profit of 133 billion in a single year.
sure wish i had stock in Microsoft after todays closing
VGChartz' sell-through estimates for their Q4 would sit at ~440K. Welfare's estimated shipments though around 450K.
At this point, I clearly couldn't tell anymore if
a) Xbox would indeed be able to pin-point ship 10K in storage worldwide
or
b) if sell-through estimates could even be 50% wrong. Still resulting in a reasonable shipment gap of 225K to have ready in store - worldwide.
On a completely different note:
Mathematically, I can't wrap my head around how Xbox are still able to pull off a 21bn fiscal year.
When, in comparison of every parameter, Playstation sits just 10bn USD ahead.
When it comes to the gap you are missing all the other previous quarters. Not that we know lifetime shipment figures, which would make it much easier. As an example we have PS5 selling more than it shipped in the March quarter with the lifetime gap between shipped and sell-through shrinking. But there still being a gap.
«When it comes to the gap you are missing all the other previous quarters. Not that we know lifetime shipment figures»
And <that's> the thing, right?
https://www.gamesindustry.biz/analyst-game-console-shipments-expected-to-decline-195-to-339m-units-in-2026
We have the sales data of Xbox (S&P Global) around 37.5 million maybe more now like 38 million. Shipment probably nearly 40 million
Revenue should definitly go up simply by adding games like COD to Switch and Halo to PS5 and what not.
You have to have customers show up for your product. Even with Nintendo's failures in the N64, GameCube, and WiiU, people still bought games(There were more 5 million sellers on WiiU than the PSP). This is what allowed Nintendo to bounce back after coming up so short. The 33 million selling N64, being outsold 3 to 1 by PS1, still had the best selling game of that generation.
Where are those software sales numbers for Xbox Series?
I do not think there are enough people to care about Xbox news anymore.
