Xbox console revenue fell 30 percent year-over-year this summer

Microsoft's recent earnings report reveals a 30% year-over-year decrease in Xbox hardware revenue. Xbox content and services revenue remained stable, with subscription and third-party growth offsetting a decline in first-party game sales. Microsoft's Xbox division experienced workforce reductions, leading to game cancellations like Perfect Dark and Everwild. Despite Xbox's struggles, Microsoft's total revenue increased by 17% and operating income rose by 22%. The company raised prices for Xbox consoles and Game Pass Ultimate in October. Microsoft is heavily investing in AI, planning to increase AI capacity significantly this year. Satya Nadella emphasized the expansion of Microsoft's AI infrastructure and data center footprint. The Fairwater data center in Wisconsin will become a powerful AI hub. Microsoft is positioning itself as a leader in cloud computing and artificial intelligence.