Microsoft's gaming division revenue continues to decline. According to the company's financial report for the third quarter of fiscal year 2026, published on April 29, Xbox brand revenues showed negative dynamics both year-over-year and quarter-over-quarter.
In the first quarter after Phil Spencer's departure and Asha Sharma's appointment as head of the division, Xbox revenue amounted to $5.34 billion – a 6.6% decrease compared to the same period last year ($5.72 billion). Compared to the previous quarter, the figure decreased by 10.4% (from $5.96 billion).
A separate note highlights the decline in revenue from Xbox content and services – a key business area. The hardware segment also significantly declined: console sales revenue decreased by 33% year-over-year, which is consistent with the trend of the previous quarter.
However, the impact of the new head is not yet reflected in the report: Asha Sharma took office only in February. One of her priorities is to return Xbox to sustainable growth. As part of the new strategy, she, along with content director Matt Booty, has already announced their intention to abandon the Microsoft Gaming branding and focus solely on the Xbox name.
In an interview with journalist Stephen Totilo, Sharma emphasized that the next 12 months will be key to restoring growth.