Xbox generated US$5.38 billion between July and September 2026, down 2% from the same period last year. Despite the gaming division's decline, Microsoft's total revenue moved in the opposite direction, rising 19% to US$92.3 billion over the same period.
The figures come from the quarterly report (10-Q) Microsoft filed with the U.S. Securities and Exchange Commission (SEC), and help assess the health of the business led by Asha Sharma.
With gaming moving backward and the rest of the company accelerating, Xbox accounted for 5.8% of Microsoft's revenue, down from 7.1% a year earlier. This is the second-lowest share of Microsoft's revenue for Xbox since 2019, when the series compiled by Jogometria from company reports begins.
The peak was 11.7%, between October and December 2020, when Xbox Series X arrived in stores. The low of 5.5% also came in 2026, between April and June.
Xbox's July-to-September share is the lowest in the series
Xbox share of Microsoft revenue by quarter, 2019 to 2026
Source: Microsoft (10-Q) · Q1 = Jan-Mar; Q3 = Jul-Sep.
Xbox's share of Microsoft revenue rose from 7.7% in Jul-Sep 2019 to 11.7% in Oct-Dec 2020, fell to 5.5% in Apr-Jun 2026 and stood at 5.8% in Jul-Sep 2026.
| Quarter | Xbox share (%) |
|---|---|
| Q3/19 | 7.7 |
| Q4/19 | 9.0 |
| Q1/20 | 6.7 |
| Q2/20 | 8.8 |
| Q3/20 | 8.3 |
| Q4/20 | 11.7 |
| Q1/21 | 8.5 |
| Q2/21 | 8.0 |
| Q3/21 | 7.9 |
| Q4/21 | 10.5 |
| Q1/22 | 7.6 |
| Q2/22 | 6.7 |
| Q3/22 | 7.2 |
| Q4/22 | 9.0 |
| Q1/23 | 6.8 |
| Q2/23 | 6.2 |
| Q3/23 | 6.9 |
| Q4/23 | 11.5 |
| Q1/24 | 8.8 |
| Q2/24 | 7.8 |
| Q3/24 | 8.6 |
| Q4/24 | 9.5 |
| Q1/25 | 8.2 |
| Q2/25 | 7.2 |
| Q3/25 | 7.1 |
| Q4/25 | 7.3 |
| Q1/26 | 6.4 |
| Q2/26 | 5.5 |
| Q3/26 | 5.8 |
Source: Microsoft (10-Q)
Note: Q1 = Jan-Mar; Q3 = Jul-Sep.
At rival Sony, the games and network segment that includes PlayStation accounted for 33% of group sales between April and June 2026.
PlayStation's share of Sony is 6 times Xbox's share of Microsoft
Gaming division's share of total revenue, April to June
Source: Sony (6-K); Microsoft (10-Q)
Between April and June, PlayStation went from 35.7% to 33% of Sony sales; Xbox went from 7.2% to 5.5% of Microsoft revenue.
| Division | Apr-Jun 2025 (%) | Apr-Jun 2026 (%) |
|---|---|---|
| PlayStation at Sony | 35.7 | 33.0 |
| Xbox at Microsoft | 7.2 | 5.5 |
Source: Sony (6-K); Microsoft (10-Q)
Game Pass and consoles drive the decline
Microsoft attributes the result to declines in Xbox Game Pass and sales of games from other publishers. Games from its own studios, including Bethesda, Activision and Blizzard, helped support revenue, but the report does not identify which titles grew.
Hardware revenue fell 14%, which the company explains in a short phrase: fewer consoles sold.
The figure is consistent with Circana's U.S. tracking. In September, Xbox Series unit sales fell 27% year over year, while PS5 sales rose 22%, according to Kotaku.
Game Pass has been under pressure since October 2025, when the Ultimate plan became 50% more expensive in the U.S. In April 2026, Microsoft cut the plan's monthly price from US$29.99 to US$22.99.
In June this year, Xbox chief strategy officer Matthew Ball acknowledged that the service had lost millions of subscribers after the price increase, according to Kotaku. Microsoft has not disclosed its subscriber total since February 2024, when it stood at 34 million. That figure includes Game Pass Core, formerly Xbox Live Gold, and is not directly comparable with earlier announcements.
Microsoft has not disclosed Game Pass subscribers since 2024
Xbox Game Pass subscribers announced by Microsoft, in millions
Source: Engadget · Milestones announced by Microsoft. The February 2024 total includes Game Pass Core, formerly Xbox Live Gold, and is not directly comparable with earlier totals. No new official total identified after February 2024.
Announced milestones: 10 million in April 2020, 15 million in September 2020, 18 million in January 2021, 25 million in January 2022 and 34 million in February 2024. The last includes Game Pass Core, formerly Xbox Live Gold; the definition change prevents direct growth comparisons with earlier announcements.
| Announcement | Subscribers (million) |
|---|---|
| Apr/2020 | 10 |
| Sep/2020 | 15 |
| Jan/2021 | 18 |
| Jan/2022 | 25 |
| Feb/2024 | 34 |
Source: Engadget
Note: Milestones announced by Microsoft. The February 2024 total includes Game Pass Core, formerly Xbox Live Gold, and is not directly comparable with earlier totals. No new official total identified after February 2024.
Cloud revenue grew by twice Xbox's entire revenue
Comparing Xbox with Microsoft's other business lines highlights the gap. Over one year, quarterly revenue from Azure, Microsoft's cloud business, grew by US$10.8 billion. That increase alone equals twice Xbox's entire revenue for the quarter.
Azure drove 74% of growth; Xbox declined
Revenue change by business line, Jul-Sep 2026 versus 2025, US$bn
Source: Microsoft (10-Q) · Total increase: US$14.6 billion.
Microsoft revenue rose US$14.6 billion: Azure added US$10.8 billion and Microsoft 365 US$4.1 billion; Xbox lost US$0.1 billion and Windows OEM US$1 billion.
| Business line | Change (US$ billion) |
|---|---|
| Azure | 10.8 |
| Microsoft 365 | 4.1 |
| Advertising | 0.6 |
| Enterprise | 0.4 |
| Support | 0.1 |
| Xbox | -0.1 |
| Licensing | -0.3 |
| Windows | -1.0 |
Source: Microsoft (10-Q)
Note: Total increase: US$14.6 billion.
Xbox also fell further behind the search advertising line, which includes Bing, Edge and LinkedIn. The gap widened from US$0.4 billion a year ago to US$1.2 billion. Just below Xbox, the enterprise solutions line, including Dynamics 365 and LinkedIn, closed in: it generated US$5.34 billion, only US$42 million less than Xbox.
Profit rises as cuts and lower Activision charges take effect
Despite lower revenue, operating profit for the segment that includes Xbox rose 2%. Microsoft cites two factors. The first is accounting-related: amortization of Activision Blizzard assets declined following the US$69 billion acquisition in 2023. Across the company, this intangible asset expense fell from US$1.5 billion to US$1.0 billion for the quarter.
The second factor is cost-cutting. The segment's operating expenses fell 3%, with the report attributing the reduction to Xbox. In July, the gaming division laid off around 3,200 people. Microsoft's overall workforce shrank 2% over one year.
Xbox moves to a new reporting segment
The report introduces a new company structure. Since September, Xbox has belonged to Devices and Consumer, alongside Bing and LinkedIn advertising and Windows sold with computers. Last year's figures have therefore been restated under the new structure and may differ from those originally reported.
Sony and Nintendo will report results for the same period on November 5, 2026.