Microsoft Corp. this week recorded a steep decline in Xbox hardware revenue in its latest quarterly report.

In Q2, Xbox hardware sales decreased by 32 percent compared to the previous year.

The More Personal Computing division, which includes the Xbox business, reported $14.3 billion in revenue. Gaming revenue decreased nine percent during this period.

In addition, Xbox content and services revenue declined by five percent from one year prior.

Microsoft increased Xbox hardware prices in May and Oct. 2025 citing changes in the macroeconomic environment. As a result, Xbox Series models prices spiked between $20 to $70 last year.