Uploaded July 2026 | Updated September 2026, 2 weeks ago
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Xbox is reportedly losing around $150 on every Xbox Series X|S console sold right now (even after the price hike).
That's... not good. I wonder if Sony and Nintendo are facing similar.
Xbox Helix and Steam — and why it no longer makes sense
• Affordability and the “memory crisis” (RAMpocalypse)
• PlayStation has decided to stop releasing its single-player games on Steam.
• Roughly 75% of Ally owners subscribe to Game Pass.
• Among non-subscribers, attach rates to the Xbox PC store are poor: about 25% if they already own an Xbox console, but only 2% if they do not.
• New users essentially treat the device as a Steam box. Exclusive leaked data from us suggests a huge amount of Xbox "Helix" users could simply ditch Xbox for Steam, inside Xbox's own hardware. It's not a one-way street Microsoft CEO Satya Nadella Demands Xbox Returns To Profitable Growth By 2027, Xbox CEO Asha Sharma Says She Will Try To Achieve That Goal. Xbox Is Currently Not Even Sustainable Breaking Even, It is losing Money Across All Aspects Of Its Gaming Business Following the big Xbox reset enacted by division Chief Executive Officer Asha Sharma, which laid off 1,600 employees (with another 1,600 jobs to be cut later), there was a lot of curiosity about Microsoft's quarterly earnings report.
Unsurprisingly, while Microsoft as a whole beat forecasts and recorded its strongest year yet, with revenue rising 18% to more than $331 billion and operating income increasing 21% to more than $155 billion, Xbox's decline continued.
Related Story Microsoft Still Bleeds Money on Every Xbox Sold After Price Hikes, and RAM Might Spike Another 2x by Fall 2027
Chief Financial Officer Amy Hood informed investors that Xbox revenue fell by 10%, with a 11% decline when adjusted for constant currency. Revenue from Xbox content and services also dropped by 10% compared to the previous year, which had benefited from strong first-party content performance (including the launch of DOOM: The Dark Ages and ports such as the massively successful PS5 version of Forza Horizon 5). The segment's gross margin dollars decreased by 2%, while the gross margin percentage improved year-over-year, driven by reduced amortization costs from the acquisition of Activision Blizzard. Xbox Report | Q4 FY26 Results Satya Nadella on #Xbox #XboxSeriesX #PS5
“We expect to return the business to growth in fiscal 2027”
“We are making the necessary decisions required across our content portfolio, platform, and operations to reset the business for long-term growth.”
▪️Total Gaming Revenue was down -10% YoY
▪️Content and Services were down -10%
▪️Hardware revenue dropped -13%
Operating expenses rose by 8% (7% in constant currency), primarily due to ongoing investments in shared R&D and impairment charges related to Xbox. Operating income declined by 14% (15% in constant currency), with operating margins decreasing year-over-year to 21%. In the immediate future, things don't exactly look rosy, either. Hood added that Microsoft forecasts Xbox content and services revenue to decline in the mid-single digits, and hardware revenue should also decline year-over-year.
Perhaps more interesting than the financials is the brief statement shared by Microsoft CEO Satya Nadella:
Follow me on social media:
Instagram: instagram.com/dreamcastguy
Patreon: patreon.com/DreamcastGuy
Twitch: twitch.tv/thedreamcastguy
Xbox is reportedly losing around $150 on every Xbox Series X|S console sold right now (even after the price hike).
That's... not good. I wonder if Sony and Nintendo are facing similar.
Xbox Helix and Steam — and why it no longer makes sense
• Affordability and the “memory crisis” (RAMpocalypse)
• PlayStation has decided to stop releasing its single-player games on Steam.
• Roughly 75% of Ally owners subscribe to Game Pass.
• Among non-subscribers, attach rates to the Xbox PC store are poor: about 25% if they already own an Xbox console, but only 2% if they do not.
• New users essentially treat the device as a Steam box. Exclusive leaked data from us suggests a huge amount of Xbox "Helix" users could simply ditch Xbox for Steam, inside Xbox's own hardware. It's not a one-way street Microsoft CEO Satya Nadella Demands Xbox Returns To Profitable Growth By 2027, Xbox CEO Asha Sharma Says She Will Try To Achieve That Goal. Xbox Is Currently Not Even Sustainable Breaking Even, It is losing Money Across All Aspects Of Its Gaming Business Following the big Xbox reset enacted by division Chief Executive Officer Asha Sharma, which laid off 1,600 employees (with another 1,600 jobs to be cut later), there was a lot of curiosity about Microsoft's quarterly earnings report.
Unsurprisingly, while Microsoft as a whole beat forecasts and recorded its strongest year yet, with revenue rising 18% to more than $331 billion and operating income increasing 21% to more than $155 billion, Xbox's decline continued.
Related Story Microsoft Still Bleeds Money on Every Xbox Sold After Price Hikes, and RAM Might Spike Another 2x by Fall 2027
Chief Financial Officer Amy Hood informed investors that Xbox revenue fell by 10%, with a 11% decline when adjusted for constant currency. Revenue from Xbox content and services also dropped by 10% compared to the previous year, which had benefited from strong first-party content performance (including the launch of DOOM: The Dark Ages and ports such as the massively successful PS5 version of Forza Horizon 5). The segment's gross margin dollars decreased by 2%, while the gross margin percentage improved year-over-year, driven by reduced amortization costs from the acquisition of Activision Blizzard. Xbox Report | Q4 FY26 Results Satya Nadella on #Xbox #XboxSeriesX #PS5
“We expect to return the business to growth in fiscal 2027”
“We are making the necessary decisions required across our content portfolio, platform, and operations to reset the business for long-term growth.”
▪️Total Gaming Revenue was down -10% YoY
▪️Content and Services were down -10%
▪️Hardware revenue dropped -13%
Operating expenses rose by 8% (7% in constant currency), primarily due to ongoing investments in shared R&D and impairment charges related to Xbox. Operating income declined by 14% (15% in constant currency), with operating margins decreasing year-over-year to 21%. In the immediate future, things don't exactly look rosy, either. Hood added that Microsoft forecasts Xbox content and services revenue to decline in the mid-single digits, and hardware revenue should also decline year-over-year.
Perhaps more interesting than the financials is the brief statement shared by Microsoft CEO Satya Nadella:
