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- Xbox hardware sales are down by 22% in Q4 2025, marking a decline for the fourth consecutive year.
- Software sales are up with a 13% increase in content and services, while gaming revenue is up by 10%.
- Microsoft has no plans to abandon the hardware market despite the declining sales and is actively working on next-gen console(s).
These are strange times for Microsoft and its gaming division in particular, with such a significant restructuring happening. Their multiplatform strategy has borne remarkable results for the gaming giant, but at the same time has also inadvertently hurt its hardware sales, which were already relatively weak.
Microsoft’s Q4 2025 financial reports revealed a 25% decrease in hardware sales compared to the previous fiscal year.
Why it matters: Xbox’s hardware is already dead in the eyes of consumers and even Microsoft’s executives. The decline in hardware sales is a testament to these claims.
Xbox hardware sales have been underwhelming since the launch of the Xbox Series consoles. In the fourth quarter of 2025, there was a notable 22% decline in hardware sales. This continued decrease marks the fourth consecutive year of declining sales for the company.
Recent price hikes for the Xbox Series X|S consoles earlier in May haven’t helped either. The Xbox Series X now costs around $600.
However, the software front has finally uplifted towards success. Content and services are up by 13% whereas the overall gaming revenue is up by 10% which is a considerable increase.
The success on the software end could be credited to the recent Xbox first-party ports on PlayStation and the overall increase in the abundance of first-party games. Xbox has been dominating the top 10 best-seller list on PlayStation, claiming 6 out of 10 spots.
Despite the decline in hardware sales, Xbox has no plans to leave the console business. They’re actively developing their next-gen consoles in collaboration with AMD, which is speculated to be a PC in a console-friendly shell. Additionally, Xbox has been evolving as a brand, so expect to see new hardware produced in collaboration with third-party manufacturers.
What are your thoughts on this report? Do you see Microsoft having a future in the console space? Let us know in the comments below, or at the official Tech4Gamers Forums.
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[News Reporter]
Shaheer is currently pursuing a Business degree while also working as a part-time Content Writer. With his deep passion for both writing and video games, he has seamlessly transitioned into a role as a Journalist. Over the past two years, Shaheer has contributed as a freelancer to various websites and landed positions on acclaimed platforms like Gamerant. Currently, his role at Tech4gamers is as a Features Writer, but he also covers News occasionally. Shaheer’s favorite gaming franchises are Assassin’s Creed and the God of War series.
Get In Touch: shaheer@tech4gamers.com
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