Overview
- Microsoft reported Q3 FY26 Xbox gaming revenue of $5.34 billion, down $380 million or 7% from a year earlier.
- Console hardware revenue fell 33% to $221 million, marking the weakest quarter of the Xbox Series generation.
- Xbox content and services declined about 5%, reflecting a softer first‑party lineup compared with last year’s stronger releases.
- Microsoft said impairment-related charges increased gaming operating expenses, which pressured profit in the quarter.
- Looking ahead, the company expects content and services to drop in the low‑teens in Q4 as new Xbox CEO Asha Sharma says player and revenue growth still trails the team’s goals.