Xbox Gaming Revenue Slips Despite Adding 200 Million Players

Microsoft reported a 7 percent decline in total gaming revenue for fiscal year 2026. This happened even though the Xbox ecosystem brought in over 200 million new players during the same period. The drop stems largely from weak hardware sales, which struggled to keep up with the expenses of running the division.

New Xbox CEO Asha Sharma is now taking aggressive steps to fix the bottom line. This includes recent job cuts and plans to increase console prices by up to 150 dollars starting August 1. The company says these price hikes are necessary to offset the rising cost of memory and storage components.

Investors are watching closely to see if these changes can bridge the gap between player growth and actual profit. While Microsoft saw success in other areas like cloud computing, the gaming unit faces a difficult path ahead. The company expects these new strategies to bring the gaming segment back to growth by the end of fiscal year 2027.