Xbox CEO Asha Sharma Reacts to Q3 Revenue Drop: “We Know We Have Work To Do”
Microsoft released its Q3 financial results for 2026, which covered a three-month period ending on March 31. Xbox CEO Asha Sharms reacts to the depressing results, as revenue was down 5% based on the same period last year. Along with that, hardware revenue was down 33% year-on-year.
While it’s a substantial dip, this marks the third in a row in which Xbox content and service revenue have fallen. Microsoft notes that the decline was partly due to the strong performance of first-party games during the same quarter a year ago, such as Call of Duty: Black Ops 6.
Xbox earnings today. While we have made progress expanding the business and our margins, player and revenue growth has not yet met our ambition. We know we have work to do to earn every player today and into the future.
— Asha (@asha_shar) April 29, 2026
In a recent post on X, Sharma reacted to the news, saying “while we have made progress expanding the business and our margins, player and revenue growth has not yet met our ambition.”
“We know we have work to do to earn every player today and into the future.”
During the earnings call, Microsoft CEO Satya Nadella referenced Xbox, noting that “foundational work” is currently being put in place “to win back fans and strengthen engagement.”
We are Xbox https://t.co/QxKTXxGgoj pic.twitter.com/mF7OeqY801
— Asha (@asha_shar) April 23, 2026
Nedall said the Xbox team is “recommitting to our core fans and players, and shaping the future of play,” adding, “Last week’s Game Pass changes are one example of how we are staying responsive to customer feedback.”
This is in reference to the drop in service revenue, as it includes the Game Pass. Sharma has already been hard at work creating a more affordable and worthwhile subscription, as she recently dropped the price on the Game Pass Ultimate.
Microsoft CFO Amy Hood also talked about the Xbox’s future, saying a quick turnaround isn’t realistic. According to VGC, Hood expects to see year-on-year declines in the Q4 period ending June 30, too.
“In Xbox content and services, we expect revenue to decline in the low-teens, reflecting a prior year comparable that benefited from strong first-party content, as well as the recent price changes for Xbox Game Pass, as we focus on delivering more value to gamers. Hardware revenue should decline year-over-year.”
We are Xbox https://t.co/QxKTXxGgoj pic.twitter.com/mF7OeqY801
— Asha (@asha_shar) April 23, 2026
While this looks disappointing, the progress Sharma has already made with Xbox has been hopeful. Her dedication to returning to Xbox has brought many fans back to the brand to see what else she’ll improve.
