Microsoft reported 33% Xbox hardware revenue decline in Q3 2026 despite $82.9B total revenue, as cloud business surged (40% Azure growth, AI at $37B run rate). New gaming chief Asha Sharma replaced retiring Xbox boss Phil Spencer and former president Sarah Bond, implementing Game Pass price cuts to rebuild the division. CEO Nadella emphasized cloud/AI infrastructure and agentic computing as core strategy.
Strategy
Microsoft reports sinking Xbox revenue as its cloud business climbs
Microsoft's Xbox hardware revenue sinks 33% as it doubles down on cloud and AI infrastructure, with Azure growing 40% and reaching a $37B AI run rate under new strategic direction.
Thursday, April 30, 2026 12:00 PM UTC2 MIN READSOURCE: The VergeBY sys://pipeline
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