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Xbox revenue is once again down across the board, per Microsoft's latest financial report.
Microsoft has now released its earnings report for its second quarter fiscal year - covering everything from October to December, 2025 - and the tech giant's gaming division isn't doing as hot as it was in the same time frame the previous year.
Revenue from Xbox hardware sales, including Xbox Series X|S consoles and accessories, dropped a whopping 32% year-over-year. That's despite, and probably because of, two big price increases within the span of five months, making the still-expensive competition look relatively affordable. The company didn't give any specific sales numbers, though it hasn't been transparent about Xbox console sales for years.
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Microsoft's entire 'This Is An Xbox' marketing campaign likely didn't help as the company implicitly told people that they didn't need an Xbox Series X|S console, really: "You're probably reading this right now from an Xbox."
Xbox content and services revenue fell 5%, while Xbox's overall revenue fell 9%. Microsoft CFO Amy Hood said its gaming results were "below expectations, driven by first-party content" and the fall off could be attributed to a "strong first-party content performance" the year prior. (Thanks, XboxEra.) Reading between the lines, that might have something to do with Call of Duty: Black Ops 7's relatively weaker sales compared to 2024's Black Ops 6.
Microsoft as a whole saw a 17% jump in revenue year-on-year. Perhaps Xbox's admittedly exciting slate can pick up the slack next year, between the Fable reboot, Forza Horizon 6, and Halo: Campaign Evolved all scheduled to launch in 2026.
Kaan freelances for various websites including Rock Paper Shotgun, Eurogamer, and this one, Gamesradar. He particularly enjoys writing about spooky indies, throwback RPGs, and anything that's vaguely silly. Also has an English Literature and Film Studies degree that he'll soon forget.
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