.png)
Microsoft has acknowledged a disappointing quarter for Xbox in its FY26 Q2 results, with the company’s finance chief saying Xbox revenue was “below expectations” for the period covering 1 October to 31 December 2025.
The earnings release highlighted Microsoft’s broader strengths in cloud and AI, but showed specific weakness in the gaming division. Xbox content and services revenue declined 5% year‑on‑year, while hardware revenue fell sharply by 32% compared with the same quarter in 2024.
Alongside the CFO’s admission, Microsoft’s leadership sought to emphasise areas of growth within gaming. The company highlighted cloud and AI as overarching strengths in the results statement, and the CEO pointed to PC and cloud gaming as positive trends amid the weaker console performance.
The mixed picture leaves Xbox facing pressure on both the hardware and content fronts, even as Microsoft leans into cloud infrastructure and AI investments that the company says will benefit gaming long term.
Further details are available in the original report on Pure Xbox: Microsoft CFO admits Xbox revenue was 'below expectations' in FY26 Q2.