- Xbox console revenue declined by 29% in Fiscal Year 2026.
- The hardware business also saw a double-digit decrease in Q4 2026, falling 13% year-on-year.
- The company hiked the price of its hardware three times since the last fiscal year began.
After a positive start to the year following the appointment of Asha Sharma and the return of exclusives, Xbox has reverted to old habits once again. The company laid off thousands of employees recently, cutting entire studios and facing backlash from the gaming community due to its treatment of id Software.
Xbox Series X|S, its staple hardware, also saw another price increase, taking its retail value to a whopping $800 from August 1st, 2026. Now, Microsoft’s annual report paints an even worse picture of the console across the previous fiscal year.
Why it matters: With Project Helix currently expected to make an even smaller dent in PlayStation’s dominance than Xbox Series X|S, the company has a lot of thinking to do about its position in the console market.
In its Fiscal Year 2026 report, Xbox revealed that hardware revenue dropped by a whopping 29% compared to FY25. The gaming giant also saw a decline in its console business in the latest quarter, with revenue falling 13% year-on-year.
In the report, Microsoft stated that this massive decline was due to a lower volume of consoles sold compared to the previous fiscal year. Considering that Xbox has raised the price of its hardware three times since last year, this sharp decrease makes sense.
However, despite selling the 1TB Xbox Series X for $800, the company is still losing money on its consoles, incurring a $150 loss per unit. In addition, 2026 isn’t looking any better for Team Green, as current-gen hardware is only expected to sell around 2.5 million units worldwide following the price hikes.
With the upcoming Project Helix also predicted to sell 2 million units at launch, Xbox is facing a horrible predicament when it comes to the console business. Microsoft CEO Satya Nadella has promised that the division will return to growth in 2027, and fans can only wait and see if that turns out to be true.
Do you think the Xbox console business is suffering due to a lack of killer exclusives? Will Project Helix turn out to be a success? Tell us in the comments below or head to the Tech4Gamers forum for discussion.
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Shameer Sarfaraz has previously worked for eXputer as a Senior News Writer for several years. Now with Tech4Gamers, he loves to devoutly keep up with the latest gaming and entertainment industries. He has a Bachelor’s Degree in Computer Science and years of experience reporting on games. Besides his passion for breaking news stories, Shahmeer loves spending his leisure time farming away in Stardew Valley. VGC, IGN, GameSpot, Game Rant, TheGamer, GamingBolt, The Verge, NME, Metro, Dot Esports, GameByte, Kotaku Australia, PC Gamer, and more have cited his articles.
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