Microsoft is reportedly sinking Xbox revenue as its cloud business soars

Microsoft’s Xbox hardware revenue continues to decline, with the company revealing a 33 percent drop as part of its earnings report. released on Wednesday. While the rest of Microsoft’s consumer-focused divisions fell, the company’s cloud and productivity businesses continued to rise, pushing the company to $82.9 billion in revenue.

In addition to the massive scale, Microsoft has continued to focus on AI in recent months, with the company reporting $54.5 billion in revenue from its cloud business, which represents a 29% year-over-year increase. “We are focused on providing cloud and AI tools and solutions that empower every business to show results in the digital age,” said Satya Nadella, CEO of Microsoft. “Our AI business surpassed $37 billion in annual revenue, up 123% year over year.” Revenues from Azure and other cloud services rose 40 percent.

Microsoft 365 Copilot also saw growth, with paid seats jumping from 15 million in the previous quarter to 20 million. Microsoft has continued to develop its products with new AI tools, including the introduction of “vibe working” Content in Excel, Word, and PowerPoint. The company says Microsoft 365 cloud computing revenue rose 33 percent during the period, while its business unit grew 19 percent.