Microsoft announced its financial results for Q2 of fiscal year 2026, related to the period between October and December 2025, including an update on its gaming business.
The company provided the usual documents, indicating that gaming revenue showcased a declining trend on both hardware and software compared to the previous year.
Overall gaming revenue was $5,958 million, down from $6,581 million in the same quarter of the previous fiscal year. The overall decline is 9%.
Xbox Content and Services revenue dropped 5% due to the comparison with the strong previous year, which benefited from strong first-party performance.
Xbox hardware revenue dropped 32% year-on-year due to the lower volume of consoles sold.
The documents also mention “impairment charges” in the gaming business, which may be related to cancellations or similar events.
It’s worth mentioning that a declining trend for the Xbox content and services revenue was expected, as mentioned three months ago by CFO Amy Hood.
The results for Microsoft as a whole show revenue at $81.3 billion, up 17% year-on-year, and operating income at $38.3 billion, up 21% year-on-year.
As usual, you may be wondering why Microsoft’s financial calendar is different from what we see for most companies, which are currently reporting Q3. Quite simply, Microsoft uses a fiscal year that goes from July to June, unlike the norm, which is from April to March.
If you’re interested in comparing the results announced today with historical data, you can read our article dedicated to the previous quarter’s financial results, announced in October.
Other gaming companies have already announced their financial results this quarter, including Koei Tecmo and Capcom. You can expect plenty more reports on this topic in the coming days and weeks.
