- Xbox was one of the only divisions of Microsoft to report losses in the latest fiscal year.
- The gaming giant failed to add any meaningful growth, losing $1.78 instead.
- Microsoft CEO Satya Nadella has promised that the company will return to profitability in 2027.
Microsoft has made it no secret that Xbox isn’t one of its most prolific earners. With the gaming giant losing an exorbitant amount of money on hardware, Microsoft has been subsidising Xbox for a while now.
However, Satya Nadella recently announced that Team Green would not get the same leeway anymore, firing over 3,000 people to make up for the company’s losses. Now, new statistics have shed light on how Xbox is performing in the Microsoft ecosystem, and the situation couldn’t be any worse.
Why it matters: With Microsoft not willing to make up for the company’s losses anymore, it will be interesting to see how long Xbox can stay in its current state while incurring such heavy losses.
According to a graph shared by Tom Warren on X, Xbox was one of the only Microsoft divisions that lost money in the 2025-26 fiscal year. The gaming giant reported losses of $1.78 billion, failing to add any growth to its parent company’s annual revenue.
The only other segment of Microsoft with a negative performance in the last fiscal year was Windows and Devices. However, even this division only recorded losses of $200 million, faring much better than Xbox.
Overall, Microsoft’s total revenue grew from $50.1 billion to $331.8 billion, with the cloud services sector adding $31.8 billion in revenue while Microsoft 365 also helped the company grow by $14.2 billion.
Hence, Xbox is one of the only divisions failing to add any growth to the tech giant, instead seeing a 29% year-on-year decline in its primary console business. Microsoft CEO Satya Nadella has promised that the gaming giant will return to profitability by 2027, with Asha Sharma also highlighting this timeline in a new report.
But with the new Xbox Helix only expected to sell 2 million consoles at launch and the current-gen struggling to compete due to price hikes, it will be interesting to see how the gaming giant rebounds.
Do you think Xbox will finally return to being a profitable bet for Microsoft next year? 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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