Microsoft Reports 7% Drop in Xbox Gaming Revenue, 29% Decline in Hardware Sales

Microsoft's Q2 FY25 earnings report reveals a mixed performance for its Xbox division, with gaming revenue declining by 7% year-over-year, totaling $6.58 billion. Despite this downturn, Xbox content and services revenue grew by 2%, largely driven by the expansion of Xbox Game Pass. However, Xbox hardware revenue experienced a significant decline of 29%, indicating challenges in the hardware market. This decline is not unexpected as Microsoft has shifted focus towards software and services in recent years. Overall, Microsoft reported a 23% increase in total revenue, reaching $69.6 billion, and a 10% rise in net income. Analysts suggest that while the current decline in hardware sales is concerning, Microsoft's strategy to broaden its gaming platform could yield positive results in the future.