Microsoft released its Q3 FY26 earnings report yesterday, and the news on the Xbox is not entirely sunshine and lollipops. The company ate a 7% ($380 million) decrease in gaming revenue in the quarter, driven by a 5% year-over-year decline in Xbox content and services revenue and a 33% drop in Xbox hardware revenue.
That's not catastrophic, but it was enough to prompt a public reaction from new Xbox CEO Asha Sharma. "While we have made progress expanding the business and our margins, player and revenue growth has not yet met our ambition," Sharma wrote on X. "We know we have work to do to earn every player today and into the future."
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