Xbox revenue falls 10 percent as Microsoft’s cloud and AI business soars

Xbox is having another tough quarter, as revenue from products and services like Game Pass subscriptions fell 10 percent over the past few months. At the same time, Xbox hardware sales fell 13 percent, according to Microsoft’s fourth quarter financial report has been released on the third.

“When it comes to Xbox, we are making important decisions about our content, platform, and services to reposition the business for long-term growth,” said Satya Nadella, Microsoft’s CEO. He added that Microsoft hopes to “return the business to growth in fiscal 2027.”

Like Microsoft promoting work in AIits cloud business has brought the company’s total revenue to $90 billion. Microsoft Cloud revenue rose 27 percent to $59.3 billion in the past few months, while revenue from its manufacturing business, which includes services like Microsoft 365 and LinkedIn, rose 14 percent to $37.8 billion. Microsoft 365 Copilot also reached more than 30 million paid seats and Azure revenue hit more than $100 billion for the first time.

Update, July 29th: Added a quote from Satya Nadella.