Revenue Decline
Ongoing coverage on Revenue Decline.
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Double Fine cuts staff, Xbox's revenue decline, and Leon Kennedy pays off - Patch Notes #63
Double Fine has laid off 23 employees following its transition to independence from Xbox. Meanwhile, Xbox reported a $1.7 billion revenue decline for fiscal year 2026, attributed to decreased content, services, and console sales. The article also touches on the erosion of institutional knowledge due to layoffs and the continued sales success of Capcom's Resident Evil series.
Xbox Was Microsoft’s Biggest Weak Spot Last Quarter
Microsoft's gaming division, primarily Xbox, experienced a significant revenue decrease of $1.7 billion last quarter, despite overall company profits rising. This decline is attributed to lower sales of Xbox hardware, services, and content, with hardware revenue dropping by 29%. Xbox CEO Asha Sharma acknowledged the business did not grow with its audience and aims for growth by the end of FY27, while CEO Satya Nadella expressed confidence in Xbox's IP and studios to drive future revenue increases.
“Necessary Decisions” Are Being Made to Reset Xbox for Long-Term Growth, Says Microsoft CEO
Microsoft CEO Satya Nadella stated that "necessary decisions" are being made to reset Xbox for long-term growth, citing a 10 percent revenue decline in the last quarter. The company plans to diversify its business across subscriptions, ads, and digital stores, and expand to new ecosystems. This strategy follows recent layoffs and the divestment of four studios: Compulsion Games, Double Fine Productions, Ninja Theory, and Undead Labs.
Xbox just had its worst quarter in years
Microsoft reported a significant 10% decline in Xbox content and services revenue for its fourth fiscal quarter, marking the worst quarter for Xbox revenue since Q1 2024. Hardware revenue also saw a 13% drop, contributing to a total Xbox revenue of $4.983 billion. The report also mentions severance expenses due to layoffs, partially offset by other cost-saving measures, while the company's overall revenue was boosted by AI investments.
Xbox CEO Asha Sharma to appoint new leaders to reverse gaming revenue decline
Xbox CEO Asha Sharma is appointing new leaders to address a decline in gaming revenue. Several of these new leaders are being brought in from Microsoft's CoreAI engineering group, where Sharma previously worked.