Storyline
Xbox Financial Decline Under Microsoft
Microsoft's Xbox division reports its worst quarterly revenue since 2024 amid layoffs, prompting CEO Satya Nadella to offer rare, muted comments and delay a return to growth until fiscal 2027.
- Microsoft Restructures Xbox, Transfers Halo Development to Activision Amid Layoffs
Microsoft has announced further layoffs and studio reorganizations as part of its ongoing 'reset' of Xbox Game Studios. Halo Studios will transition to a support role for existing games, while Activision takes over development of the next Halo title. Additional layoffs affect 268 employees across multiple studios, with further consolidations involving Rare, Obsidian, and others.
- Xbox Posts Worst Quarterly Revenue Since 2024 as Nadella Offers Rare, Muted Comments on Gaming
Microsoft's Q4 FY2026 earnings showed steep declines in Xbox revenue amid ongoing layoffs, with CEO Satya Nadella offering an unusually vague and subdued outlook, pledging a return to growth only by fiscal 2027.