Xbox leader Asha Sharma says there’s “more demand than consoles available” as Xbox hardware sales dip by 14%
Microsoft’s first-quarter 2026 results revealed mixed performance for the Xbox division amid broader company strength. The company reported Xbox content and services revenue declined 2% year-on-year, with Xbox hardware sales falling 14% year-on-year due to lower console volumes.
Despite the hardware decline, Xbox leadership offered an optimistic interpretation of the results. Asha Sharma, the Xbox leader, claimed in a statement posted on X that there is “more demand than consoles available” and that console sales “remain constrained by supply”—suggesting the decline reflects production limitations rather than flagging consumer interest.
The Xbox revenue decline was partially offset by strong performances from first-party titles. Minecraft and World of Warcraft: Forever achieved record-breaking numbers, while Call of Duty was noted for its “most acclaimed release.” The company emphasized it is entering “one of [its] strongest first- and third-party line up in years,” positioning the division for recovery.
Microsoft’s overall financial performance remained robust. The company reported $92.3 billion in total revenue (up 19% year-on-year) and $36.6 billion in net income (up 32% year-on-year). The Devices and Consumer segment, which includes Xbox, generated $15.5 billion in revenue, down 3% year-on-year. The decline in Xbox content and services was primarily attributed to lower third-party content performance and Game Pass performance.