In Microsoft's latest financial results from Q4 2026 , the tech giant reported that Xbox content and services saw a 10% decline in revenue compared to the previous year, while Xbox hardware revenue declined by 13% YoY. This is no surprise, as Xbox CEO, Asha Sharma previously shared that Xbox revenue was plummeting, which was part of the reason the gaming division resorted to such intense layoffs in early July. Following the financial report, Microsoft CEO, Satya Nadella commented that Microsoft has adjusted its strategy so that Xbox's publishing and hardware business so that the gaming division can see growth in 2027.

Satya Nadella, CEO of Microsoft 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. 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 2027.