RESOLVING THE LEDGER
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Xbox CEO Asha Sharma responded to the company’s Q4 2026 fiscal report, which showed a continued decline in earnings for both content and hardware.
Microsoft’s Form 10-K SEC filing has been released, showing that Xbox has continued to experience notable revenue loss at the end of their 2026 fiscal year. As told in the filing, Xbox’s revenue decreased by $1.7 billion, or 7%, driven by declines in Xbox content, services, and Xbox hardware.
Revenue for Xbox’s content and services decreased 5%, while hardware revenue decreased 29% due to a lower volume of consoles being sold.
As told by Microsoft CFO Amy Hood during a shareholder meeting on July 29, via PlayDayOne , “Xbox content and services revenue decreased 10% against a prior year comparable that benefited from strong first party performance.”
Hood also noted that Xbox’s operating expenses increased 8% and 7% in constant currency, driven by investments in R&D and "impairment charges” in the company, while operating income decreased 14% and 15% in constant currency. Operating margins decreased year over year to 21%.
“In Xbox content and services we expect revenue to decline in the mid-single digits. Hardware revenue should decline year over year,” she explained.
It wasn’t long before these numbers hit social media, leaving players anxious about the future of the business, especially given Xbox's significant restructuring and mass layoffs earlier this month.
Later that day, CEO Asha Sharma published a statement concerning the report on X, giving an optimistic outlook on what the company’s earnings should look like by the end of 2027.
“In FY26, over 200 million new players came to Xbox and our games, but our business did not grow with our audience. We need to close that gap by investing in what players value. That will take time, but we expect to return to growth by the end of FY27,” she wrote.
In FY26, over 200 million new players came to XBOX and our games, but our business did not grow with our audience. We need to close that gap by investing in what players value. That will take time, but we expect to return to growth by the end of FY27.
— ASHA (@asha_shar) July 29, 2026 Microsoft CEO Satya Nadella echoed this sentiment in the earnings call, saying, “When it comes to Xbox we are making the necessary decisions required across our content portfolio, platform, and operations to reset the business for long-term growth.
"We have the best IP in the industry and talented studios around the world, and believe we can bring these strengths together and return the business to growth in Fiscal 2027.”
EA’s quarterly fiscal report surfaced the day prior, showing notable growth thanks to Battlefield 6 ’s record-breaking launch in 2025 — something that earned its CEO an $8 million bonus , despite layoffs to the staff that made the game in March.
Virginia (she/her) is IGN’s News Editor. With ten years of experience reporting on games and entertainment, she’s got a storied background in the fighting game community, influencer news, and viral online trends. Find her on Twitter at @TheeMissGlaze .
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