Xbox hardware revenues continue to dwindle, down 6% to $329 million through Q3

As an Amazon Associate, we earn from qualifying purchases. TweakTown may also earn commissions from other affiliate partners at no extra cost to you.

Xbox gaming hardware revenues are down year-over-year for the fifth consecutive quarter in a row.

4

Microsoft's Q3 FY25 results are up, and Xbox delivered a new all-time high of $5.721 billion revenue during the quarter. While total earnings were up +5%, Xbox hardware earnings are down once again, this time decreasing by -6% year-over-year. Xbox made an estimated $329 million from hardware in the quarter, which includes Xbox consoles and accessories. With these results, Q3'25 represents the fifth straight quarter in a row of Xbox hardware revenue declines on a year-over-year comparable basis.

It's also the lowest hardware revenue of the Xbox Series X/S generation of consoles (Q3'24 had previously been the lowest at $347 million), and at just $329 million out of $5,721 million, hardware made up 6% of total quarterly revenues.

4

Despite these lower earnings, Microsoft is still committed to the console market. Xbox gaming CEO Phil Spencer recently affirmed that consoles are a "good, established business" even if it's not an accelerated growth vector for the company. Consoles may be a saturated platform, which makes them all the more integral for Xbox's continued earnings--in short, Xbox hardware customers are too valuable to simply stop serving because they are embedded, active-spending users.

4

Xbox president Sarah Bond has also publicly announced new console hardware is in development that will deliver the "largest technical leap you will have ever seen in a hardware generation."

Reports indicate that Microsoft is also testing out up to three controller prototypes, one of which could be the accidentally leaked Sebile controller with its cloud-enabled connectivity.

There's also rumblings that Microsoft is testing out its own dedicated handheld, although plans for a first-party Xbox-branded handheld may be slim; Microsoft is teaming up with ASUS on a new handheld of some kind that is believed to use Microsoft's new slimmed-down Xbox UI.