Despite a dismal financial earnings report released by Microsoft showing a steep decline in its gaming sector (XBOX) for Q4, Asha Sharma has a positive outlook for FY27.
XBOX has found itself in the news once again. Microsoft’s 10-K SEC filing has been published, and it shows that the company that brought fans Halo has continued to experience steep revenue loss at the end of its Q4 2026 fiscal year. The filing shows the gaming division’s revenue decreased by $1.7 billion, or 7%, driven by declines in console content, services, and hardware sales.
Interestingly enough, the company as a whole was seeing continued growth, with revenue up 18%, but the gaming division has been driving losses. This is despite waves of layoffs (touted as a company reset); CEO Asha Sharma claimed this company reset was a ‘recommitment to gaming investment.’ It’s worth mentioning that just before last week’s launch of Halo: Campaign Evolved, XBOX experienced massive outages.
After such a turbulent year, revenue from XBOX’s content and services decreased by 5%, while hardware revenue decreased by 29% due to lower console sales volume. Microsoft credits the drop in hardware sales to the volatile market for RAM, which had the adverse effect of increasing XBOX console prices. Asha Sharma took to X (formerly Twitter) to respond to the financial report release, and she said, “Over 200 million new players came to XBOX and our games, but our business did not grow with our audience. We need to close that gap by investing in what players value,” adding, “we expect to return to growth by the end of FY27.”
Microsoft CEO Satya Nadella chimed in on the earnings call, saying, “When it comes to XBOX, we are making the necessary decisions required across our content portfolio, platform, and operations to reset the business for long-term growth,” adding, “We have the best IP in the industry and talented studios around the world, and believe we can bring these strengths together and return the business to growth in Fiscal 2027.”
Sharma had previously claimed the company would be recommitting to game investment; then the following week, the company laid off 1,600 workers, with 1,600 more promised to come down the pipeline for 2027.
