Xbox Revenue Slump Clouds Microsoft’s FY26 Q2 Gains
TL;DR Summary
Microsoft posted FY26 Q2 revenue of $81.3 billion, up 17% year over year thanks to cloud and AI growth (Azure up 39%), but Xbox revenue declined across the board: gaming revenue fell 9% and content and services down 5% year over year; hardware revenue plummeted 32% as the Series X|S era wanes. Windows OEM and ads rose, highlighting a broader service-led shift for Microsoft, but the Xbox’s longer-term outlook remains murkier amid cooling first-party content momentum.
- Xbox Revenue Declines As Microsoft Reports FY26 Q2 Earnings Insider Gaming
- Xbox Hardware Sales Plunge 32% YoY as Services Keep Gaming Division Afloat TechPowerUp
- Microsoft blames first‑party weakness for Xbox revenue dip Windows Central
- Xbox Revenue Drops 9% in Holiday 2025 Quarter, Hardware Revenue Falls 31% VGChartz
- Xbox down YoY in both hardware and services for Q2 FY26 XboxEra
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