Microsoft just reported its Q4 2025 results , providing some interesting insights into its gaming ventures. The company's overall quarterly revenue increased by an impressive 17% compared to the same period last year, reaching $81.3 billion. This growth is primarily driven by the strong performance of the cloud sector. However, Microsoft's gaming divisions are experiencing challenges with declining revenue. In its Xbox unit, hardware revenue decreased by 32% year-over-year, significantly impacting the business. The overall Xbox division saw a 9% decline, while Xbox content and services dropped by 5%. The services section, which includes the Game Pass subscription, is the only area not experiencing a steep decline. By recently rising Game Pass subscription prices, Microsoft aims to offset some of the hardware losses.

An interesting detail from the earnings report is the Windows OEM and Devices sector, which reported a modest growth of 1%. This is minor considering the Windows 10 end-of-life, which was expected to boost this sector significantly. Windows itself reported a 5% growth, but this is only a slight increase compared to what Microsoft anticipated from OEMs purchasing Windows license keys for Windows 11, as well as a major consumer upgrade spree to Windows 11 devices. With Xbox revenue declining significantly year-over-year for several years, it is becoming less of a priority for the company, which now derives substantial revenue from Microsoft Azure and 365 Commercial subscriptions.