The state of Xbox now: It’s not exactly surprising that Microsoft’s gaming subdivision is taking such drastic steps.
While Microsoft overall remains a gaming juggernaut, Xbox is firmly in third place in what’s pretty much a three-way console race.
The firm doesn’t publish unit sales numbers, but Xbox hardware revenue fell by 29% in fiscal year 2026, which ended in June.
Why it matters: Much like streaming, gaming has seen a wave of consolidation and shakeups in recent years.
Microsoft has also been a financial lifeline for many smaller game studios, so its leaner strategy could now ripple across the wider industry.