Xbox revenue has dipped from the previous quarter, according to Microsoft’s latest earnings report.
On April 29, 2026, Microsoft released its third-quarter fiscal year 2026 earnings report. When examining the Xbox-specific portions of the report, a decrease in revenue is evident in the first quarter following Phil Spencer’s retirement and Asha Sharma’s appointment as head of the division. Of course, as Sharma only took over in February, neither her impact nor the strategies she’s begun to implement are reflected here.
Xbox Revenue Is Down 10% From Previous Quarter, Per Earnings Report
The information provided by Microsoft notes that Xbox content and services revenue declined 6.6% year over year. Xbox revenue was $5.34 billion, down from $5.72 billion at this time last year. There was a 10.4% decrease from the previous quarter, when the division’s revenue closed at $5.96 billion.
Consistent growth is a key pillar issue for Asha Sharma. Part of her strategy to revitalize the Xbox brand is simply that: restoring the brand name. Sharma and Matt Booty, brand CCO, recently put out a joint memo discussing how, moving forward, they would be moving away from the Microsoft Gaming branding and focusing solely on the Xbox name. Sharma is eyeing the next 12 months as a significant timeframe that, she hopes, will see Xbox return to growth.
“We are wanting to see Xbox return to growth next year, and so we’ve got work to do,” she’d say in an interview with Steven Totillo of Game File. “There’s no silver bullets, and our focus is going to be: how many players are playing every single day in the Xbox ecosystem?”
Xbox hardware revenue decreased 33% year over year, consistent with the previous quarter’s declines. Overall, Microsoft’s total brand revenue increased 18% to $82.9 billion. For additional details on the company’s third quarter of the fiscal year, click here.
For more Xbox news, check out what Asha Sharma has had to say about affordability for players in the near future. Sound off about this story and all others in our official Discord server. Also, don’t forget to sign up for our weekly newsletter.
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