Microsoft has released its financial results for the latest fiscal quarter, reporting higher overall revenue alongside a continued decline in Xbox sales. The company posted a 17% increase in revenue, reaching $81.3 billion, while net income rose even more sharply, climbing 60% to $38.5 billion.
Unfortunately, the picture is less positive for the gaming division. Gaming revenue fell by 9% to $11.47 billion, while Xbox hardware sales dropped another 32%, settling at $1.07 billion. Revenue from Xbox content and services — including games, subscriptions, and online services — also declined by 5%, reaching $10.4 billion.
Xbox Hardware Still Struggling
As expected, Microsoft’s current multiplatform strategy has not helped revive hardware sales. Xbox consoles are no longer the only way to access certain Microsoft-owned franchises, which reduces the need for players to buy dedicated hardware.
While rumors about the next Xbox continue to circulate, the data shows that the gaming business is facing ongoing challenges, especially when compared to the company’s strong performance in other areas.
Overall, Microsoft continues to grow, driven largely by artificial intelligence and cloud services, even as gaming struggles to keep pace.
“We are only at the beginning phases of AI diffusion and already Microsoft has built an AI business that is larger than some of our biggest franchises,” said Satya Nadella, chairman and chief executive officer of Microsoft. “We are pushing the frontier across our entire AI stack to drive new value for our customers and partners.”
Microsoft CFO Amy Hood also highlighted the strength of the company’s cloud business: “Microsoft Cloud revenue crossed $50 billion this quarter, reflecting the strong demand for our portfolio of services. We exceeded expectations across revenue, operating income, and earnings per share.”
Despite strong financial results overall, the continued decline in Xbox hardware sales remains a key concern for Microsoft’s gaming strategy going forward.
