Microsoft CEO Satya Nadella has said the company expects Xbox to return to growth during fiscal year 2027 as it continues a broad restructuring of its gaming business.
Speaking following Microsoft’s latest earnings results, Nadella said the company is reshaping Xbox across multiple areas to strengthen its long-term position.
“When it comes to Xbox, we are making the necessary decisions required across our content portfolio, platform, and operations to reset the business for long-term growth. We have the best IP in the industry and talented studios around the world, and believe we can bring these trends together and expect to return the business to growth in fiscal 2027.”
The comments come after Microsoft reported that Xbox content and services revenue declined 10% year over year during the fourth quarter of fiscal year 2026. That was the only Xbox-specific financial metric included in the company’s latest earnings release.
Microsoft does not break out Xbox as a standalone reporting segment, instead including it within its More Personal Computing division alongside Windows OEM, Windows devices, search advertising and other consumer businesses. As a result, the company did not disclose standalone Xbox revenue, operating profit, hardware sales or updated Game Pass subscriber figures.
The earnings report also confirmed that Microsoft recorded restructuring-related costs during the quarter, with severance expenses and impairment charges affecting Xbox’s results. No financial value for those charges was disclosed.
Despite the recent decline in Xbox content and services revenue and the ongoing restructuring, Nadella said Microsoft believes its portfolio of gaming intellectual property and worldwide studio network position the business to resume growth in fiscal year 2027.
