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Xbox has been having a hard time selling consoles lately, and it didn’t get any better over the 2025 holiday quarter. Microsoft has just reported its Q2 2026 earnings, including the news that hardware sales were down 32% year-over-year, after quarter upon quarter upon quarter of hardware declines.
Though we don’t have actual numbers to tell how much revenue is being lost out on here, we can get a sense of how grim this is for the hardware by looking at past quarters. Last quarter, Q1 of 2026, hardware declined 29% year-over-year. The quarter before that, Q4 of 2025, hardware was down 22%. The quarter before that? Down 6%. Before that? Down 29%. And before that, 29%, in Q1 of 2025, which was July – September of 2024. Going back even further through Microsoft’s earnings reports, the prior year quarters saw declines of 42% (woah) in Q4 of 2024 and 31% in Q3. In fact, you have to go all the way back to Q2 2024, which was October through December of 2023, to find the last time Xbox’s hardware revenue was better during that period than it was the year before – it was up a whopping 3% over
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