Xbox Revenue Slump Clouds Microsoft’s FY26 Q2 Gains
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.