Xbox revenue drops 10 percent as Microsoft’s cloud and AI business surges
The Verge·July 29, 2026
Microsoft's Xbox revenue has declined by 10 percent, with a 13 percent drop in hardware sales, according to the company's fourth-quarter earnings report. The decrease in revenue from content and services, including the Game Pass subscription, has contributed to Xbox's tough quarter. Meanwhile, Microsoft's cloud and AI business is experiencing significant growth, offsetting the decline in Xbox revenue. Xbox head Asha Sharma has recently announced a "reset" plan for the company, including layoffs and changes to game development studios.
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