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Xbox revenue drops 10 percent as Microsoft’s cloud and AI business surges

July 29, 2026 Emma Roth

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Xbox is having yet another tough quarter, as revenue from content and services like its Game Pass subscription dipped 10 percent over the past few months. At the same time, Xbox hardware sales declined 13 percent, according to Microsoft's fourth-quarter earnings report released on Wednesday.

The news comes just weeks after Xbox head Asha Sharma announced a "reset" plan for Xbox that included sweeping layoffs and the spinoff of four games studios, including South of Midnight developer Compulsion Games and Psychonauts creator Double Fine Productions.

Sharma has also made some other big changes to Xbox, including lowering Game Pass prices, te …

Read the full story at The Verge.

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Xbox revenue drops 10 percent as Microsoft’s cloud and AI business surges

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