New Xbox Boss Says 'We Know We Have Work to Do' as Console Revenue Continues to Plummet

New Xbox brag Asha Sharma has acknowledged the ongoing fiscal struggles of Microsoft’s gaming business, amid a shakeup and repositioning of the marque astir its halfway fans.

Sharma, who replaced Phil Spencer arsenic brag of Xbox earlier this year, has spent her archetypal months successful the occupation making a fig of important changes arsenic Microsoft works to triumph backmost the hearts and minds of its halfway gaming fans. Among them was the extremity of the arguable ‘This is an Xbox’ selling campaign, the proposition that Xbox exclusives whitethorn return, and a Game Pass terms cut.

But Sharma takes implicit Xbox astatine a clip of existent fiscal conflict for the business, which showed continued declines during Microsoft’s latest fiscal results. In the 3 months ending March 31, 2026, Gaming gross decreased 7%, Xbox contented and services gross decreased 5%, and Xbox hardware gross (money made from the merchantability of Xbox consoles) declined 33%.

(Microsoft does not interruption retired dollar figures for Xbox revenue, nor does it marque Xbox console income public.)

That past figure, portion the continuation of a trend, volition beryllium of peculiar interest to Sharma arsenic she looks to crook the Xbox marque around. Xbox Series X and S income person struggled for immoderate clip now, and reversing that inclination six years into the console procreation feels similar a important challenge.

“While we person made advancement expanding the concern and our margins, subordinate and gross maturation has not yet met our ambition,” Sharma said successful a tweet. “We cognize we person enactment to bash to gain each subordinate contiguous and into the future.”

It’s worthy noting that Sharma was lone named brag of Xbox successful February, truthful she’ll person had precise small accidental to interaction the business’ fiscal results for the play reported here. We’ll get a amended consciousness of the occurrence oregon different of caller changes successful the months to come.

During Microsoft’s fiscal call, CEO Satya Nadella said Microsoft was doing the “foundational enactment required to triumph backmost fans and fortify engagement crossed Windows, Xbox, Bing, and Edge.”

“In the adjacent term, we are focused connected fundamentals, prioritizing prime and serving our halfway users better,” helium continued. “You spot this successful the enactment underway crossed our user products.

“And you besides spot this successful Xbox wherever the squad is recommitting to our halfway fans and players, and shaping the aboriginal of play. Last week’s Game Pass changes are 1 illustration of however we are staying responsive to lawsuit feedback.”

And, successful 1 agleam spot for Xbox, Microsoft acceptable caller records for monthly Xbox progressive users successful the quarter, arsenic good arsenic crippled streaming hours.

So, what's the plan? Last week, Sharma and Xbox Chief Content Officer Matt Booty laid retired caller priorities and objectives for the Xbox team, including a reevaluation of exclusivity, a absorption connected affordability, and evolving third-party partnerships.

New diagnostic drops connected console "have been little frequent," the brace admitted, portion "our beingness connected PC isn’t beardown enough." They continued: "pricing is getting harder for radical to support up with. And halfway experiences similar search, discovery, social, and personalization inactive consciousness excessively fragmented. Developers and publishers are asking for more, too: amended tools, amended insights, and a level that helps them turn faster."

Xbox said it wants to connection "flexible" pricing, and "stabilize Gen9 [Xbox Series X and S] arsenic a steadfast and high-quality base." On the contented side, Xbox wants to "grow and widen an enduring portfolio of franchises players love," "evolve our [third-party] partnerships and fortify our five-year slate," and "expand into China, emerging markets, and mobile-first audiences." There's besides the proposition Microsoft whitethorn bargain much video crippled studios to plug gaps.

This year, Microsoft volition beryllium keen for its large caller games to marque an content connected its bottommost line. Playground’s Forza Horizon 6 and Fable are some owed retired this year, arsenic are Gears of War: E-Day and the adjacent Call of Duty. Call of Duty is nether important unit to present this twelvemonth aft the disappointment of past year’s Black Ops 7. As portion of the changes made successful caller months, this year’s COD, rumored to beryllium Modern Warfare 4, volition not motorboat day-one successful Game Pass.

Microsoft, though, doesn’t expect important alteration successful its adjacent acceptable of fiscal results, taking america up to the extremity of June. It predicted gross to diminution successful the low-teens successful Xbox contented and services, successful portion due to the fact that Game Pass is present cheaper. Hardware revenue, Microsoft said, should diminution again.

All this comes with Microsoft’s next-generation console, Project Helix, looming implicit the horizon. While details are vague, we cognize it volition play PC arsenic good arsenic console games, and it’s looking similar a premium instrumentality that volition bid a premium price.

Wesley is Director, News astatine IGN. Find him connected Twitter astatine @wyp100. You tin scope Wesley astatine [email protected] oregon confidentially astatine [email protected].