Microsoft gaming revenue slides as Xbox Series X price hurts

Technology Oct 30, 2025

Xbox hardware revenue dropped 29% in Microsoft's Q1 2026 results. Tariffs and inflation have pushed the Xbox Series X up to $599.99.
Even with their "Xbox everywhere" push, gaming content and services barely grew—just 1%—and Microsoft expects hardware sales to keep sliding for now.

Azure revenue jumped 40%

While gaming stumbles, Microsoft's cloud division is thriving: Azure revenue jumped 40%, helping cloud services hit $49.1 billion (up 26% from last year).
Overall, the company pulled in $77.7 billion this quarter—a solid 18% boost—mostly thanks to its booming cloud and productivity businesses.