Given latest information concerning the state of the Xbox Sequence S and X consoles, it shouldn’t come as a shock that Xbox’s {hardware} gross sales proceed to nosedive.
Microsoft shared its Q1 2026 earnings, revealing that Xbox {hardware} income was down 29 % yr over yr.
This newest monetary information paints a bleak image for the {hardware} division, because the numbers hold getting worse fairly than higher. Final quarter, {hardware} gross sales had been down 22 %, down 29 % for the primary two quarters of 2025, and down 42 % in This fall of 2024.
Issues will solely get more difficult as the corporate additionally has to deal with Donald Trump and his blatant abuse of tariffs, which have pressured Microsoft ot make some unpopular selections like elevating the worth of the Sequence X console to $599.
The corporate has additionally applied a brand new technique with its “Xbox in all places” initiative, which promotes the concept that any machine that may play its video games within the cloud is an Xbox.
Microsoft’s gaming division has additionally begun ditching the concept of unique video games and, mainly, conceded the “console wars” when it introduced that Halo: Marketing campaign Developed, a remake of the primary recreation within the franchise, is coming to the PlayStation 5.
Regardless of all of the dire information about {hardware} gross sales, Microsoft just isn’t out of the console enterprise but. The corporate simply launched two new handheld units in partnership with ASUS, the ROG Xbox Ally and Xbox Ally X.
Firm heads like Xbox President Sarah Bond and CEO Satya Nadella have additionally begun teasing the subsequent Xbox console, sharing that it is going to be a premium, high-powered PC/gaming console expertise that can most probably embrace a number of storefronts, like Steam.
We will see what the longer term holds for the corporate.