XBOX's annual revenue has declined, but Satya Nadella remains optimistic
Microsoft has concluded its financial results for 2026, which ended on June 30. It reported an overall increase in corporate revenue, though its gaming division did not perform as well.
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- Microsoft as a whole earned $331.8 billion over the year, an increase of 18% compared to fiscal year 2025. Net profit also rose—up 31% to $133.7 billion.
- XBOX revenue dropped to $21.79 billion for the year, a decline of 7%. However, the previous year was a record year for XBOX, making it challenging to match those results.
- Revenue from console sales and other gaming hardware continued its sharp decline, plummeting by 29% this time.
- Revenue from XBOX gaming content and services decreased by 5%. As Microsoft explained, this was due to weaker game sales from its internal studios compared to a year ago. The figures could have been worse, if not for the growth achieved by Game Pass. The corporation did not specify how much Game Pass specifically contributed, but last year it earned $5 billion.
- Microsoft also revealed several figures separately for the fourth quarter (April-June 2026). During this period, overall XBOX revenue fell by 10%, revenue from game and service sales dropped by the same 10%, and revenue from console and other hardware sales fell by 13%.
- During a conference call with investors and analysts, Microsoft's CEO Satya Nadella expressed hope that XBOX would perform better this year. He believes that the restructuring, which has already resulted in 1,600 layoffs and will lead to more layoffs by summer 2027, will aid the division.
“We have made the necessary decisions regarding our XBOX content portfolio, platforms, and operations to restructure the business and ensure long-term growth. We have the best IP in the industry and talented studios around the world. We believe we can leverage these advantages and return the business to growth by the 2027 fiscal year,” stated Nadella.