Why Xbox Hardware Sales Plummeted While Content Thrived
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Why Xbox Hardware Sales Plummeted While Content Thrived
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Microsoft reported an 18 percent year-over-year increase in overall revenue and a 12 percent rise in net income for Q1 2026, while Xbox hardware sales fell 29 percent and overall gaming revenue declined 2 percent. Xbox content and services revenue grew by 1 percent, driven by increased Xbox Game Pass engagement and strong third-party game performance. Microsoft raised prices for consoles, Game Pass, and development kits in response to market changes. The company projects continued overall revenue growth but expects a slight decline in Xbox content and services revenue due to fewer first-party releases. Next-generation Xbox hardware is in development in partnership with AMD.
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