Satya Nadella says Microsoft is "making the necessary decisions" for gaming after revenue decline

Microsoft reported stronger-than-expected fiscal 2026 earnings, driven by surging enterprise AI demand that pushed Azure past $100 billion in annual revenue for the first time, while its consumer hardware segment struggled — Xbox content and services fell 10% in the fourth quarter. During an earnings call, CEO Satya Nadella addressed the gaming division’s performance by stating that the company is making the necessary moves involving its games library, systems, and internal processes. The comment comes as part of a previously announced 100-day reset plan under newly appointed gaming chief Asha Sharma, who has since laid off staff and promised a return to console-focused priorities. Though Microsoft added over 200 million new players in fiscal 2026, revenue failed to keep pace; Sharma has projected a return to growth by the end of fiscal 2027.