Technology Jul 29, 2026 · 1 min read

Xbox revenue drops 10 percent as Microsoft’s cloud and AI business surges

Xbox is having yet another tough quarter, as revenue from content and services like its Game Pass subscription dipped 10 percent over the past few months. At the same time, Xbox hardware sales declined 14 percent, according to Microsoft's fourth-quarter earnings report released on Wednesday. The new...

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The Verge
by Emma Roth
Xbox revenue drops 10 percent as Microsoft’s cloud and AI business surges
Vector illustration of the Xbox logo.

Xbox is having yet another tough quarter, as revenue from content and services like its Game Pass subscription dipped 10 percent over the past few months. At the same time, Xbox hardware sales declined 14 percent, according to Microsoft's fourth-quarter earnings report released on Wednesday.

The news comes just weeks after Xbox head Asha Sharma announced a "reset" plan for Xbox that included sweeping layoffs and the spinoff of four games studios, including South of Midnight developer Compulsion Games and Psychonauts creator Double Fine Productions.

Sharma has also made some other big changes to Xbox, including lowering GamePass prices, tes …

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This article was originally published by The Verge and written by Emma Roth.

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