Microsoft reports sinking Xbox revenue as its cloud business climbs

A striking development has emerged in artificial intelligence. Tech Close Tech Posts from this topic will be added to your daily email digest and your homepage feed. Follow Follow See All Tech News Close News Posts from this topic will be added to your daily email digest and your homepage feed. Follow Follow See All News Microsoft Close Microsoft Posts from this topic will be added to your daily email digest and your homepage feed.

Follow Follow See All Microsoft Microsoft reports sinking Xbox revenue as its cloud business climbs Xbox hardware revenue took a 33 percent hit, even as the company raked in $82. Xbox hardware revenue took a 33 percent hit, even as the company raked in $82. by Emma Roth Close Emma Roth News Writer Posts from this author will be added to your daily email digest and your homepage feed.

Technical Details

Follow Follow See All by Emma Roth Apr 29, 2026, 8:43 PM UTC Link Share Gift Image: Cath Virigina / The Verge Emma Roth Close Emma Roth Posts from this author will be added to your daily email digest and your homepage feed. Follow Follow See All by Emma Roth is a news writer who covers the streaming wars, consumer tech, crypto, social media, and much more. Previously, she was a writer and editor at MUO.

Microsoft’s Xbox hardware revenue continues to tumble, with the company revealing a 33 percent decline as part of its earnings report released on Wednesday . Even though the rest of Microsoft’s consumer-focused division took a dip, the company’s cloud and productivity businesses continue to soar, driving the company toward $82. 9 billion in revenue.

Along with declining Xbox hardware revenue, Microsoft reported a 5 percent drop in Xbox content and services as well. Microsoft has seen a significant amount of executive turnover over the past few months, with the retirement of Xbox chief CEO Phil Spencer and the departure of former Xbox president Sarah Bond. This has left former Microsoft CoreAI head Asha Sharma in charge of the gaming giant, which has struggled with its identity in recent years .

Industry Implications

Already, Sharma has lowered the price of Xbox Game Pass and has taken steps to rebuild Xbox’s identity . Microsoft CEO Satya Nadella reflected on these changes during an earnings call, saying it’s part of efforts to “win back fans” across its brands, including Xbox. “The team is recommitting to our core fans and players and shaping the future of play,” Nadella said.

“Last week’s Game Pass changes are one example of how we are staying responsive to customer feedback. ” Nadella also cited changes to Windows, which have “brought performance improvements for lower memory devices, streamlined the Windows Update experience, and brought back focus to core features and fundamentals. ” The company recently started letting customers pause Windows Updates indefinitely, and also got rid of “unnecessary” Copilot buttons across Windows 11 apps.

In addition to an executive shuffle, Microsoft has only pushed further into AI in recent months, with the company reporting $54.

This advance offers important signals about the future of the sector, and the tech world is watching closely.