"The decline in Xbox hardware revenue has become so predictable you could set your Starfield watch to it. Microsoft reported its second-quarter earnings on Wednesday and, yes, console sales are down yet again. But the rest of the gaming division didn't have a such a hot holiday either. The company is blaming year-over-year declines on the lack of strong releases near the end of 2025. Hmmm."
""Xbox hardware revenue declined 32 percent." But last year's numbers weren't exactly stellar. The gaming division saw a 7 percent decline overall in the second quarter. Xbox hardware was down 29 percent this time in 2025, while content and services were only up 2 percent. Holiday 2024 had Indiana Jones and the Great Circle and Microsoft Flight Simulator 2024 but was otherwise quiet."
"Holiday 2025, on the other hand, saw the release of Ninja Gaiden 4 and The Outer Worlds 2, while Flight Sim came to PS5. Also the underperforming Call of Duty: Black Ops 7 which, combined with a major Game Pass price hike, might have led to a spike in churn. We don't know, though, because Microsoft still isn't releasing new subscriber numbers."
Microsoft's gaming revenue fell again in the second quarter, with Xbox hardware revenue plunging and content and services also weakening. Xbox hardware revenue declined 32 percent year over year, and overall gaming saw declines compared with prior-year quarters that benefited from strong first-party content. Holiday 2025 produced some releases like Ninja Gaiden 4 and The Outer Worlds 2, but other titles underperformed and Flight Sim reached PS5. Call of Duty: Black Ops 7 underperformed and a significant Game Pass price increase may have increased churn. Microsoft has not provided updated Game Pass subscriber numbers. Xbox consoles continue to shrink as a share of Microsoft Gaming.
Read at Kotaku
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