Microsoft's Gaming Division Continues to Post Losses
Microsoft's financial report for the second quarter of 2026 shows overall company revenue growth, but the gaming division continues to demonstrate a sustained decline.
Video game revenue fell by 9%, amounting to $11.47 billion, while direct Xbox hardware sales decreased by 32%, reaching $1.07 billion.
Against this backdrop, Microsoft's total revenue grew by 17% to $81.3 billion, and net profit increased by 60%, reaching $38.5 billion. This growth is largely driven by cloud services and artificial intelligence technologies. As CEO Satya Nadella stated, Microsoft has "built a larger AI business than some of our largest brands."
Simultaneously, revenue from Xbox content and services (games, subscriptions) is declining, having fallen by 5% to $10.4 billion. These figures confirm a long-standing trend of the gaming business's shrinking share in the company's overall portfolio, despite persistent rumors about the development of the next generation of consoles.
Executive Vice President Amy Hood noted that Microsoft Cloud revenue exceeded $50 billion in a quarter for the first time, highlighting the company's strategic shift towards cloud and AI technologies.