Xbox hardware sales continue to tank

Microsoft is continuing to defy the fortunes of its Xbox console business, with sales plummeting by 29% in just one quarter. The news that has been confirmed from Microsoft's Q1 2026 earnings report paints a bleak picture for the struggling gaming hardware division.

Despite the dismal outlook for the Xbox brand, which began showing signs of struggle two years ago, the company remains optimistic about its prospects thanks to the continued growth of its cloud services and Azure platform. Revenue for these areas surged by 28% year-over-year, with Azure specifically growing a staggering 40%. The success of Microsoft's cloud offerings has been a game-changer for the company, as it continues to drive up profits.

However, while Microsoft's cloud business is booming, the outlook for its gaming hardware division remains uncertain. With Xbox sales continuing to decline and prices having increased significantly due to tariffs and inflation, there are concerns that the division may not be able to right itself in time.

To mitigate this risk, Microsoft has opted to focus on an "Xbox everywhere" strategy, which prioritizes content and services over console hardware sales. While this approach has yielded some success in terms of revenue growth for the company's content and services arm, it remains to be seen whether it will be enough to stem the decline in Xbox sales.

With Microsoft's earnings report showing that its productivity and business processes are generating significant profits, while Xbox hardware sales continue their downward spiral, one thing is clear: the company's future success will depend on the continued growth of its cloud services.

I feel bad for Xbox fans, it's like they're getting left behind . Microsoft's strategy might just work, but what about all the devs who create games for the console? They'll be stuck with outdated hardware . I'm kinda glad Azure is killing it tho , that's some serious business right there!

So they're saying Xbox is still tanking but cloud services are saving the day? 40% year-over-year growth for Azure? That sounds like a solid plan B, but what about console gaming enthusiasts who want to buy actual hardware? Is it too late for them? The "Xbox everywhere" strategy might work in terms of revenue growth, but will it bring back the hype around Xbox? I need some more info on how they're planning to do this...

omg i was just playing fortnite with my friends last night and we all loved it but reading this news makes me wonder what happened to xbox 29% decline in sales is crazy! i mean i know prices are high now due to tariffs and inflation, but still... does anyone think xbox will ever be as popular as ps5 or switch again? also microsoft's cloud services are growing so fast it's wild i just wish they could figure out how to make xbox games work on pc too

I'm telling you, this is a no-brainer ... wait, no, I don't think so. The fact that Xbox sales are plummeting by 29% makes me think Microsoft needs to seriously reevaluate their gaming hardware strategy. I mean, how long can they keep relying on cloud services and Azure growth to save the day? But at the same time, their focus on "Xbox everywhere" is kinda genius... it's like, why bother trying to compete in a crowded console market when you can own the online gaming space with your awesome cloud services? And let's be real, those cloud services are bringing in some serious cash . So maybe, just maybe, Microsoft knows what they're doing and this "Xbox everywhere" thing is the future of gaming... no, scratch that, I'm still not convinced

I'm not surprised to see Xbox sales taking a hit. I mean, have you played the latest games? They're so expensive! And with all the new console options out there, people are just choosing to game on PC or other platforms instead. Plus, Microsoft's been trying to make its Azure platform a big deal for years now, and it's finally starting to pay off. I'm not saying Xbox is dead yet, but if they don't start innovating on the hardware side soon, they're gonna be stuck in neutral . Still, I've got faith in Satya's plan - "Xbox everywhere" might just be the way to go. We'll see how it plays out...

Ugh, it's like the writing was on the wall for Xbox ! I mean, 29% sales plummet in just one quarter? That's a major problem ! But you know what's going right? Microsoft's cloud services are killing it ! Azure is growing like crazy and that's where the future is, IMO . They need to focus on content and services over console hardware because, let's be real, people don't want to buy games for a console that's just collecting dust . The "Xbox everywhere" strategy might be a stretch, but at least it's trying . If Microsoft can keep those cloud profits rolling in, I'm sure they'll be alright #GamingRisks #CloudIsTheFuture #MicrosoftReboot

It's crazy how companies like Microsoft can have such a huge divide in their performance . On one hand, they're raking it in from their cloud services and Azure platform , but then you look at Xbox sales and it's just tanking . It's like they're trying to make up for the decline in console sales with their "Xbox everywhere" strategy, which is kinda a clever move . But let's be real, how long can that continue? I mean, what about people who still want a good gaming experience on a console? Are they just gonna have to pay more for it because of tariffs and inflation? It's not ideal, but I guess that's just the way the cookie crumbles . Microsoft needs to figure out how to balance their cloud services growth with keeping their Xbox brand relevant . Fingers crossed they can make it work .

man, 29% down in just a quarter? that's crazy! but at least microsoft is trying to pivot and make xbox more than just a hardware thing - the 'xbox everywhere' strategy makes sense, especially with all the new content they're releasing. it's like they're saying, yeah, we may not be selling as many consoles, but our games and services are killing it! and let's be real, their cloud business is a whole different story - 40% growth is no joke! so even though xbox sales are down, microsoft's overall future looks pretty bright to me.

OMG , I'm low-key surprised by how fast Xbox sales have dropped 29% ! Like, two years ago they were already showing signs of struggle but I didn't think it'd be that bad ! On the other hand, Azure is killing it with a 40% growth rate! That's some serious cloud power . But Xbox hardware... idk man , I guess you gotta pivot to "Xbox everywhere" or something . 73% of Microsoft's revenue now comes from non-gaming sources ... that's a lot of other areas where they're crushing it . Cloud services are definitely the future .

I think it's way too early to give up on Xbox . The fact that Microsoft is doubling down on "Xbox everywhere" strategy just shows they're not willing to throw in the towel yet . And let's be real, who needs a console when you can play all your fave games on PC or cloud? I mean, I'm a total Xbox noob, but even I know that's where it's at . The whole gaming industry is shifting towards cloud gaming, and Microsoft is right behind the curve . Sure, sales are down, but that doesn't mean they're done for . Maybe they just need to pivot a bit more and focus on what really matters: awesome games and services .

I mean, have you guys noticed how Microsoft's Xbox console business is like a broken record ? It keeps plodding along, but with declining sales every quarter . I'm not surprised, though - they've been warning us for ages that their gaming hardware division wasn't doing so great .

But on the bright side, those cloud services are killing it! 40% growth in Azure is no joke . It's like Microsoft is finally getting its act together and focusing on what really matters: profits over consoles . And you know what? I think they're on to something with this "Xbox everywhere" strategy - who needs a console when you've got access to all that awesome content and services, right?

Still, it's tough to see the Xbox brand struggling so mightily . But hey, at least Microsoft has a solid backup plan in place (aka cloud services) to keep them afloat for now ️. Fingers crossed they can get that gaming hardware division back on track soon

man microsoft is really struggling with xbox, but hey at least their cloud service is killing it 28% year-over-year growth and a 40% increase for azure? that's straight fire i feel like they need to keep focusing on the cloud side of things, but also i get why they wanna try to revive xbox sales... its just hard when prices are increasing due to tariffs and inflation anyway, "xbox everywhere" strategy is a solid plan, hope it pays off for them

omg, xbox is really struggling i mean 29% drop in sales is crazy! microsoft is trying to pivot with this 'xbox everywhere' strategy but it's hard to say if that'll pay off they need to bring out some new and exciting console hardware ASAP or risk losing gamers altogether meanwhile, their cloud services are killing it azure growth is insane at 40% can't wait to see how this all plays out

I'm not sure how much more these guys can keep throwing good money after bad with Xbox . They need to face reality and accept that maybe consoles aren't the way forward anymore? I mean, have you seen those console prices lately?! 40% growth on Azure is amazing though - that's what Microsoft needs to focus on. Cloud services are where it's at!

Ugh I'm so done with the Xbox situation ... it's like they just gave up on making consoles that people actually want to buy . 29% drop in sales is wild, that's crazy ... and now they're all about cloud gaming, which is cool and all, but what about the ppl who still wanna play games on their console? Not everyone's got a solid internet connection, you know? And with prices rising due to tariffs and inflation, it's only getting harder for them to compete . I'm not saying they can't make it work, but they gotta find a way to balance that cloud growth with some console sales, ya feel?

ugh, what's going on with xbox? i mean, i'm all for microsoft focusing on cloud stuff and making that cash, but it's a shame cos i was really hyped about getting a new xbox when my old one broke . 29% decline in sales is crazy, especially if they're not selling as many consoles. maybe microsoft should just try to make the xbox more affordable so people can still buy them ?

I'm kinda surprised by this news . One minute Xbox is like a superstar gaming console, and the next it's struggling to keep up with the competition . But on the bright side, Microsoft is trying new things like "Xbox everywhere" which might just pay off in the long run . Their cloud services are killing it, that's for sure ! It'll be interesting to see how they balance out their gaming hardware and software sides. Maybe we'll get a revamp of Xbox soon?

I'm genuinely surprised by how Microsoft is handling this situation . On one hand, they've got some really solid tech under their belt with Azure and their cloud services - I mean, 40% year-over-year growth? That's huge! But at the same time, it's like, what about the Xbox hardware division? Can't they just try to, you know, make consoles that people actually want to buy?

I think the whole "Xbox everywhere" strategy is an interesting move, but I'm not sure if it'll be enough to stem the decline in sales. It's like, sure, content and services are making money, but what about the console itself? People still want a solid gaming experience that can't be replicated on their PC or phone, you know?

And don't even get me started on the pricing - 29% decline in just one quarter? That's some serious hurt . I guess only time will tell if Microsoft can turn things around and make Xbox relevant again... but for now, it's hard to see a clear path forward .

I was just thinking about how much I love trying out new recipes in the kitchen... have you guys ever tried that Japanese recipe for Teriyaki Chicken? it's so good! I made it last week and my family just loved it . I swear, cooking is like solving a puzzle - you gotta balance all these flavors and textures to get it just right . And don't even get me started on the importance of using fresh ingredients... I went to this amazing farmers market over the weekend and picked up some the freshest veggies ever . Anyway, back to Microsoft... yeah, their cloud services are looking solid but can they get Xbox sales back on track?