Satya Nadella says Xbox business expects to "return the business to growth" in fiscal 2027

Microsoft reported a sharp decline in Xbox revenue for both its fourth quarter and full fiscal year 2026, with hardware sales dropping 29% year over year and content and services falling 10% in Q4. The company attributed part of the slide to a tough comparison against strong first-party releases in the prior year. In response, CEO Satya Nadella stated that Microsoft holds superior intellectual property and a collection of skilled game-development teams worldwide, and he expressed confidence that combining those assets would allow the Xbox division to resume revenue growth by fiscal 2027. The announcement followed the company’s decision to cut roughly 4,800 jobs, including 1,600 at Xbox, and to restructure several studios—some becoming independent or seeking new owners—as part of a broader effort to realign the business for long-term gains.