Xbox hardware sales fell 14 percent according to the company’s fourth-quarter earnings report released Wednesday. This contraction arrives shortly after Xbox head Asha Sharma initiated a strategic reset, which involved staff layoffs and the divestment of four game studios. To combat these losses, the company will increase console prices by at least $100 beginning August 1.
Microsoft Revenue Surges on AI as Xbox Struggles
A 10 percent decline in Xbox content and services revenue highlights a difficult quarter for Microsoft’s gaming division, even as the company’s broader cloud and AI infrastructure continues to fuel massive growth. The results underscore a widening gap between the firm's stagnant hardware sales and its high-performing enterprise software segments.
Contrasting this slump, Microsoft’s cloud business generated $59.3 billion, a 27 percent increase. Productivity and business processes, including Microsoft 365 and LinkedIn, rose 14 percent to $37.8 billion. The PC market also faced headwinds, as the Windows OEM and devices segment dropped 7 percent due to lower consumer demand.
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