XBOX Content and Services Revenue Drops 10% in Latest Quarter

The latest Microsoft earnings report shows that Xbox revenue fell in the last quarter. The report, released on July 29, noted that Xbox content services revenue declined 10% from the same quarter a year earlier.

Additionally, hardware revenue declined 13% for the quarter, and full-year Xbox revenue is down 5% from last year. Overall, Microsoft’s revenue was up 31.34% year-over-year to $133.75 billion.

Xbox Revenue Declines During Microsoft’s Major Gaming Reset

This comes at a time when XBOX is undergoing a major reset. CEO Asha Sharma recently issued a memo noting that the state of the XBOX business is not good. The major reset has resulted in changes such as studios like Double Fine becoming independent once again and thousands of jobs being cut.

Microsoft’s earnings report also notes a dollar $3.2 billion gain from an investment in Anthropic, the makers of Claude AI, and “lower-than-expected expenses related to the Voluntary Retirement Program, which were partially offset by severance expense and impairment charges in XBOX.”

Microsoft executives then tout the company’s AI revenue success, closing out the fiscal year with a 27% year-over-year increase. Before being put in charge of the XBOX division, Asha Sharma was a part of Microsoft’s AI department. She was put at the helm of XBOX following Phil Spencer’s retirement and Sarah Bond’s subsequent resignation.

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