Xbox Hardware Revenue Craters 32%

Microsoft's Xbox hardware revenue fell 32% in the final quarter of 2025 and overall gaming revenue declined 9% year-over-year, according to the company's latest quarterly earnings, released as part of results showing Microsoft's total revenue exceeded $80 billion.

Xbox content and services revenue, which includes Game Pass, dropped 5%.

No games

[rsilvergun]

They seem to have bought Bethesda and Id just to make sure that they don't make games for their competitors. Same with Activision. This wasn't hard to predict. It is frustrating how little antitrust law enforcement we get though.

Refusing to do antitrust law enforcement doesn't just get you more expensive product it gets you inferior product.

If you like video games you want to see the government enforce antitrust law because it'll get you better games through competition.

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[spacepimp]

Id released DOOM the Dark Ages in 2025 on the PS5. It looks like Starfield has a pending Playstation release this year. Elder Scrolls 6 does look like a PC/Microsoft XBOX exclusive. Is there a document that confirms your claims of xbox/pc only for those companies? They claimed the opposite about exclusives, but it would not be the first time M$ lied.

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[jacks smirking reven]

I don't think we've seen an ES6 game-play trailer much less it being an exclusive. Considering how well Skyrim and Fallout 4 sold on Playstation I just don't see them making those games exclusives, at least not forever, at most it'll be the PS version released after PC/Xbox.

Everything the XBox division is doing is leaning away from bespoke hardware consoles and that makes sense for them, they'd rather be a big publisher and leaving the bespoke hardware to Sony and Nintendo, it's basically PC all the way no

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[rsilvergun]

Yeah, but that's 2 games, one of which is kinda short one and done and the other is frankly an unfinished mess.

There's nothing like FFX or Halo or Zelda. Nothing that makes someone sit up and say "I'm buying that!"

I'm kind of being flippant with "no games", more specifically there's no "killer app".

The last big release from a 1st party I can think of is Horizon Forbidden West. That's the last "system seller" I can think of. Ghost of Yotei is certainly AAA, but it's a $60m dollar game. Horizon, b

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[TheMiddleRoad]

Last I checked, new Switch sales are strong.

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[alvinrod]

Microsoft's problems have nothing to do with antitrust laws. The fact that they're doing so poorly suggests that no action on the part of the government is needed or that buying development studios up for exclusivity on their Xbox platform did not benefit Microsoft at all. Their failings are because of idiotic management trying to force a business model onto customers that the customers don't want. Perhaps they would have been more successful if they had more games people wanted to play, but they don't. For

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[UnknowingFool]

This does not really seem to be the case as Microsoft seems to be trying to abandon Xbox hardware more than leveraging it as an anticompetitive measure. The main reasoning is that Xbox Game Studios is worth more than the Xbox hardware division. Limiting games only to Xbox hurts overall sales of those games and those studios. Rather Microsoft is rebranding everything as "Xbox" to save face. For example the newest Asus gaming handheld, the ROG Xbox Ally X does not run Xbox games but Windows PC games. Personal

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[Luthair]

I believe last year Microsoft required every division have 40% margins hence the layoffs in Xbox.

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[leonbev]

Actually, more layoffs and Microsoft game price hikes would probably help.

It would get a lot more game developers out of these massive corporate run megastudios that can't seem to be able to produce a game on schedule anymore, and into smaller and more nimble startup companies who have a financial incentive to release something on time.

They've quit hardware

[suutar]

As I recall they've announced that they're pretty much done with hardware and moving to streaming games. Not surprising folks aren't buying the expensive box when they can get an Amazon Fire Stick instead.

21st Century Response.

[geekmux]

Microsoft's Xbox hardware revenue fell 32% in the final quarter of 2025 and overall gaming revenue declined 9% year-over-year..

(Xbox Marketing) "..with our next premium iteration of the Xbox coming in at a suggested retail of $1200.."

(Sony CEO) "I want the severed head, of the one that put a 75% discount on our $600 PS6, on my desk by COB."

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[leonbev]

I imagine the conversation going more like:

Sony Engineering Underling: "RAM is going to cost 3 times more for the PS6 because Open AI bought up all of the supply for the next 18 months."

"Sony CEO: Shit... raise the price on the PS6 by $300!"

Microsoft Engineering Underling: "RAM is going to cost 3 times more for the XBox WhateverWeWereGonnaCallIt because Open AI bought up all of the supply for the next 18 months."

Microsoft CEO: "Meh, who cares. We want everyone using Azure anyway. Cancel the new XBox Whateve

Seems plausible.

[fuzzyfuzzyfungus]

It's fairly hard to see why anyone would be contributing to xbox hardware revenue at this point, aside from possibly buying controllers. In pure hardware terms MS and Sony are shipping aggressively similar gear; and in software terms the list of games that are fully exclusive or 1 console + PC but not the other console is overwhelmingly tilted toward playstation(with Nintendo kind of doing its own thing, as ever, with a small but very high exclusivity lineup).

What's the case for buying the xbox under those circumstances? I guess the cheaper Xbox variant is the minimum-viable Call of Duty box; so that's something(though something MS is actively undermining by trying to pitch game streaming on basically anything with a display as the minimum-viable option); but that's a thin list of advantages.

was this a bubble?

[roc97007]

I'm wondering if the gaming industry didn't recognize a bubble started by the couf which is now in the final stages of crashing.

I'm also wondering if GenZ's attraction to simplification, analog presence, raw dogging, and other factors left the industry with nowhere to go when their main audience (which I guess would include me) aged out.

YankGPT

[Tablizer]

I predict MS will "remedy" this by sticking allegedly fancy AI in it and promising soon-to-be-released modules that fetch you a beer and yank you off while gaming. The predicted best-selling title will be Boebert's Theater Counter-Stroke II

Not surprised. better in theory than reality

[Somervillain]

In 2021, I had a choice of a PS5 and XBox...and I chose XBox. I chose it because of the Games Pass...a dream come true at $10/month and Sony's offering sucked bad. Now it look like Sony's offering is really decent. I desperately wish Nintendo had a games pass. There's no way I am buying $70 games I'll play for a week and my kids will play for a day. But that aside, I chose wrong.

The games pass started out awesome and cheap. Now it's expensive and has changed little since I got it. Even MS's top games are now put behind the $30/month tier. I didn't mind it when it was EA's and the cost was $15....I'm an adult and know EA wants their cut and $15 wasn't terrible. PS5 now has the portal, which, if it had better WiFi, would be a dream for me, as well as VR. There are also small details, like how PS5 uses real hard drives and the XBox requires expensive proprietary ones that stick out of your console (which I hate because I like to travel with mine)

MS Gave me hope when they announced the XBox ROG Ally...holy shit!...a nintendo switch equivalent that works with the Games Pass? I bought one right away. Fortunately, I bought it from a store that accepts returns because that device was DOGSHIT!!!!! The XBox has a smooth experience, like most consoles. The XBox Ally was a windows computer and a science experiment. It SOMETIMES worked in a dock. It sometimes loaded a game without stalling. Simple, basic old-fashioned games, like Silksong worked smoothly...sometimes....if the device was plugged in. It was always stalling and lagging. In the first week, was unbootable. I had installed 2 games and just let it patch itself and I had to do a hard reset. After the 3rd hard reset, I returned it. It was DOGSHIT. Expensive, unreliable, convoluted, and SHIT SHIT SHIT performance. I couldn't play simple games, let alone complex 3D ones without issues.

XBox is great in theory. I love it as a basic console. I still love what they are doing...in theory. However, nothing has changed since 2020...or really even since they released the Games Pass for the XBox One

They are rumored to do more collabs like the ROG Ally and let partners create hardware. I'd love an XBox Series X in a Nintendo Switch form factor and will pay top dollar for it. The ROG Ally was close, but Windows is a terrible OS overall and really shitty for a gaming device. Yeah, it can run games, but it's update system breaks the device and requires you to go into windows mode and the background processes make games stall all the time. But if they actually get the proper XBox experience on a handheld or tablet, it would be awesome.

Unfortunately for them, Valve seems to have gotten the memo and their new Steam offerings for this year seem quite exciting, especially if they release a more powerful steamdeck. So I may get what I've always wanted...the XBox experience with the travel-friendly nintendo form factor...but it seems more likely I'll get it from a Steam device than an XBox one unless they really step up their game.

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[paugq]

Aren't PlayStation Plus Extra / Premium essentially the same as Game Pass Premium / Ultimate? It seems to be working for Sony. I don't think that's the cause for XBox's problems.

Impossible to buy Xbox hardware

[paugq]

I had XBox Game Pass Ultimate, playing games via cloud streaming. I tried to buy a physical Xbox for Christmas but it was just impossible. Stores simply have zero stock, even Amazon was out of stock, and they all told me it's not because they don't want to sell them but because they are not receiving them. I ended up buying a Playstation 5 and a Playstation Plus subscription.