I don’t see why you should be shock for Xbox to report what they expected they would report. Honestly is more shocking when they expect a drop but actually beat expectations by being above it like they were like 2 or 3 reports ago.
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When you look to push a Samsung TV or an Amazon Fire TV stick, more than your own hardware, what does one expect? Bond was a disaster for the Xbox hardware brand & sales and we’re still feeling the effects of her role…
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Nadella and Hood are the disaster for the brand and the hardware, Sarah and Phil worked within the confines they wanted for Xbox.
They’re still there and at any time can push Xbox back to the same focus on margins that they did after the ABK deals.
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Asha is already doing a far better job of talking up Xbox than Bond did in over 2 years. I think we’ll see a difference over the next year with hardware sales alone. No doubt there will be more job losses, mind 
Hardware sales going up is a given as long as they’re willing to take a hit on them( this is the weird part, because it’s both making them and actually doing sales so it’s a double hit), as they only have to make more to be available on shelfs.
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I don’t think it will be just Xbox ready to take a hit, just talking up the console gives a little bit of confidence in the brand, something lacking under Bond’s leadership IMO
Bond may have done lots of good things, but talking up Xbox consoles wasn’t one of them for me
That’s likely because making and selling Xboxes is the biggest drain in the margins they have. Cutting production and sale of them likely kept a lot of their operational cost down and kept the margins within that over all 30%(Xbox as a whole not individual studios) that Nadella and Hood wanted them to hit.
I just hope now that they’re going to try to revitalize the brand, they will also be willing to take a hit on Helix when it launches.
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Think like that Xbox might as well stop selling consoles altogether j/k. I think not trying to sell more consoles has done more harm than good & it’s being reflected in Xbox revenue reports over the last year . Console gamers buy AAA games a lot more than the TikTok mobile phone-loving generation do
Xbox need to be more clever too. You don’t have to do price cuts all the time, but targeted ones at dates like a launch of a Big game like say Halo or hardware deals at Black Friday or the likes of Easter, when people are looking to buy
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In another sense what do you expect to happen when Microsoft isn’t producing consoles or selling them at a increased price due to the increased cost of production and rampant inflation? That wasn’t a reality that only came about because Xbox (which Bond was never in Phil or Sharma position anyway) chose to expand Xbox Cloud Gaming (which also Sharma said she’ll continue to push to improve the quality and experience of cloud gaming directly on a TV; she’s not back tracking).
Alternatively, up until now Xbox has consistently shown overall gaming growth (they’re largely only not now due to BO7 underperforming), and even now Satya is praising “record PC & cloud growth”. At a time when consoles were more expensive to produce and sell, Xbox did a great job expanding into new markets and it has benefited them. Now with Helix on the horizon (and hopefully better production pipelines to deal with this awful economy), Xbox can put more emphasis on console hardware sales in ADDITION to continuing to grow in PC and Cloud markets.
It doesn’t have to be “This new executive is doing better than that old executive.” In fact a lot of what Sharma is doing is building upon the foundations Phil and Sarah built for Xbox. If anything Sharma is being even more aggressive with the openly stated goals for cloud, PC, and mobile growth.
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For some people here and on social media, it’s like the old leadership pissed in their cornflakes every morning…
They rebuilt Xbox from the edge, expanded it to a massive player in gaming all in the confines of Microsoft - now we’ve new leadership that might be given more freedom again, and is able to build on the strong foundation particularly when combined with Asha’s marketing ability
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Their recent quarterly revenue report is very easy to explain, Blops6 was super big, Blops7 was just big because of more robust competition and being a back to back installment.
This year MW will have massive competition if GTA6 launches, but GTS6 alone will lilely offset and revenue loss CoD is going to have.
I have a feeling project helix is next year. I’ve always felt it was a mistake for the old regime to abandon hardware. They also need to rethink project latitude imo because the sales on ps5 isn’t worth torpedoing the Xbox brand imo . I think for helix they will need some exclusives if they want to pus forward
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They didn’t abandon hardware. I think they did what was best. They had to account for that 30% from somewhere and hardware was already a loss leader. They had to focus on the only thing that could generate revenue which was Gamepass and sales. They were focusing on using the hardware they had in the cloud to try to reach more people that way. the other endpoint was PC. If Asha was put in the same situation she would follow suit.
Exactly I wonder what happens if this year’s COD is weak again. There’s more competition now. You already had Bobby Kottick saying competition from BF led to the 60% drop.
Here's Bobby Kotick's dec25 deposition, clearly saying that "INTENSE COMPETITION FROM BATTLEFIELD is what drove sales 60% down on COD"
— abstract concept (@MisterSpace3) April 28, 2026
NO SUCH BULLSHIT AS "GAMEPASS IS THE REASON"
that crap, you only hear from microsoft corporate dick suckers TO DAMAGE CONTROL XBOX'S GREED pic.twitter.com/hIWiQUeIrL
I’m not sure where abandoning hardware comes from? Helix was literally developed under said old regime. They talked about it frequently. They were hamming it up as early as 2024. At a time when hardware production was just more expensive than it was worth to Microsoft (especially when Microsoft had other priorities) they realistically couldn’t make and produce that much, and what they did make they knew would sit on shelves at higher prices than most people wanted to pay and again Microsoft had other priorities and weren’t willing to eat that cost. So Xbox pushed into PC & used the ROG Xbox Ally as an OEM device to skirt around production issues. And they got more aggressive with cloud gaming. As for multiplatform, yes the brand is important. Microsoft’s overall actions (not just at Xbox) have proven they need the trust of their customers and a powerful brand. However, the brand is also only so important. The problem is that the console market still isn’t growing and even Xbox’s console sales have been reasonably stable. Like yeah the year over year keeps dropping, but that’s also taking into account that they never really did a console refresh this Gen (nothing major like a pro model and they already launched with their budget S model), rising prices, and poor stock. Overall total console sales remain “fine”. Sharma’s goal of stabilizing this Gen AND launching Helix is rather interesting. It sounds like they’ll still be producing and selling series consoles even after Helix launches. Curious to see how that does for both models.
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Looking over old data from Circana, CoD started this gen pretty much on top. But once competition arrived in some form, it can either be dethroned for the year, or not be number 1 or 2 for months on end the following year.
You keep on bringing up cloud gaming & yet that’s never correlated with profits/growth of Cloud with to a massive upsurge in GamePass subs & you need to be a Game Pass Sub user to use Xbox Cloud Gaming. So I would put to you, most of the growth & profit from cloud is from the Azure side that is also used in gaming, not Xbox Cloud gaming
Increased cost of production and rampant inflation are affecting lots of businesses but I don’t see LG or Samsung stopping production of their phones or TV’s nor do I see Nintendo trying to limit Switch sales to keep costs down
Xbox sales were terrible last year & that’s being reflected in revenue with is down across the board on Despite Xbox being on mobile, TV’s, PC’s, Cloud & even PS5. Let’s face it, poor Xbox console sales & people leaving the Xbox console’s last year, is starting to bite into the growth & profits of Xbox
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I don’t think it was just compertistion, it was more because last years COD wasn’t very good & the forced 4 player online co-op was a complete turn off for many people. Who on earth thought forced 4 player online co-op was a good a idea ?
It should been like Space Marine 2 or Toxic Commando where you could have AI used for the 4 player mode for those who don’t want play the story mode online with other human players
Nadella keeps bringing up Cloud gaming too(also doing great hours apparently) because it’s the thing that Phil did that made Xbox worth investing into by Microsoft.
The main issue with it is that Xcloud is Game Pass(so to me, basically cloud gaming revenue is Game Pass revenue: 5 billion), Game Pass is strongest in their own ecosystem as people signed up for the first party games and online.
Pc Game Pass has been growing, but it doesn’t have the same growth vector that Game Pass on consoles does because that’s tied to the hardware and online.
Game Pass by itself hasn’t been advertise properly, so people/casuals likely don’t even know they can sign up for Game Pass and play their games through Xcloud. Which includes a growing list of games they can buy outside of Game Pass.
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I’m not sure what this sentence is: “You keep on bringing up cloud gaming & yet that’s never correlated with profits/growth of Cloud with to a massive upsurge in GamePass subs & you need to be a Game Pass Sub user to use Xbox Cloud Gaming.”
It sounds like you’re trying to differentiate cloud from cloud gaming as if I ever brought up Azure. All I said is that when hardware was more expensive to produce, Xbox chose to expand in cloud and PC and multiplatform releases, and we’ve see them grow in overall revenue in many many quarters when hardware was down. Xbox console sales have been down year over year since like 2023. Yet overall gaming revenue has consistently increased. Overall gaming revenue has increased even after ABK was purchased as seen with the results from last year and especially looking at Black Ops 6 performance.
No, that’s not what’s reflected here. Heck, Xbox hardware sales have had worst year over year decreases and overall gaming revenue has grown significantly more. What’s largely reflected here is that Black Ops 6 was a phenomenal game that did incredibly well, and Black Ops 7 is a much worse recieved game that’s under performing.
During the Q2 Webcast, the only Xbox/Gaming-related statement from Satya was that Microsoft saw “record PC players and streaming hours on Xbox.”
Amy Hood’s Xbox/Gaming-related statements included, “…below expectations, driven by first-party content with impact across the platform.”
Guidance for Xbox’s FY26 Q3 was “an expected decline in the mid to single digits, against a prior year comparable performance, partially offset by a growth in Xbox Game Pass. Hardware revenue should decline year-over-year.“
I’m not making any of this up on the spot. Expanding to new markets has helped Xbox grow. Yes Cloud Gaming is tied to game pass, and yes the growth in game pass subs and consistent revenue from that has offset or even helped Xbox grow during an awful economy.
The console market doesn’t such much growth or change period. This is something the entire market is struggling with and the current only real solution is to raise prices for console gamers (hardware, accessories, and especially games). It’s also become much more expensive to produce consoles. In this case there’s no “But if only…” to work off of here. Microsoft WAS NOT making Xbox consoles when it had become too expensive and they were not bearing the brunt of that cost and lowering the price when the company wide mandate was about investing in AI. Microsoft was doing mass layoffs and pushing stricter margins across the board in order to find money to keep up in the AI race. This was at the same time that producing console hardware became more expensive specifically because of the AI race tech companies were engaging in (along with general supply chain issues and inflation). Xbox pushed a solution to a problem.
BTW this is Q1 FY26. Microsoft literally projected an overall decline for every metric and surprisingly didn’t see one for content and services which helped offset the gaming revenue decline they did project. They cited growth in game pass subscriptions and third party performance as the reason why. Satya Nadella cited record number of PC users because of the OEM ROG Xbox Ally.
Content and Services instead rose by 1%, a 5 to 7% increase over Microsoft’s projected results. It was primarily driven by growth in Game Pass subscriptions, and offset by a decline in first-party revenue. Last year’s Q1 saw a 61% growth due to the full integration of ABK, following the FTC’s losing their attempt to block the acquisition.
Personal Computing, which Xbox is a part of, saw an 18% increase YoY in operating income. With Amy Hood’s main metric for the company being margins, this would seemingly be a positive result.
… Content and services revenue increased 1% and was relatively unchanged in constant currency driven by better than expected performance from third party content segment. Gross margin dollars increased 11% and 10% in constant currency and gross margin percentage increased year over year. Driven by sales mix shift to higher margin businesses, operating expenses increased 4% and 3% in constant currency, and operating income increased 18% and 16% in constant currency. Operating margins increased three points year over year to 30% driven by the higher gross margin noted earlier.
Across every endpoint focused on our high-margin content and services, we launched critically acclaimed games like Keeper, Ninja Gaiden 4, and The Outer Worlds 2, reaching 155 million monthly active users in Minecraft, an all-time high and set (a) new record for overall content and services revenue for the quarter. We also saw a great response to the Xbox Ally launched two weeks ago and set new records for players on pc.
Microsoft was focused on improving their margins last year and Xbox did last quarter. Xbox also surprisingly grew in content and services, which was unexpected and that offset the expected overall revenue decline. You keep acting like Xbox was in a dire position last year that was directly caused by their decision to aggressively expand in PC and Cloud Gaming markets. You keep acting like there was an option they actively chose to prioritize that over console. Reality is that it was either go more aggressive in cloud gaming & PC platforms or just do nothing because they still weren’t heavily producing consoles & doing sales when Microsoft was focused on margins and consoles cost more to produce. You can criticize them not stockpiling production beforehand, but Microsoft has never been that type of company and regardless inflation has been affecting console prices since even before the AI mess.
Expanding to new users on PC and expanding Xbox Cloud Gaming to more devices and more subscription options has an impact. It’s not a this or that. It’s not making people leave Xbox and leading to worse sales. Last quarter literally saw an uptick in game pass subs and third party content sales (that’s on console & PC, but also game pass users possibly buying more because they could then start playing owned games on the cloud even with just a $10 essential subscription) led to a growth in content and services that offset the expected overall revenue decline. Regardless they also achieved the higher margins which were mandates from the top. And again we’ve seen Asha Sharma specifically state that she wants to go even harder than the previous regime with all their platform which yes included the console, but also included Cloud Gaming and PC.
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