Microsoft shared details on the company's financial results for Q2 FY25 on Wednesday, revealing that gaming revenue was down 7% year-over-year for the quarter ending Dec. 31, 2025. The quarter did see Xbox content and services revenue up 2%, to which the company credits growth in Xbox Game Pass. Xbox hardware revenue declined 29% year-over-year.

Q2 earnings reveal a decline in Xbox hardware revenue, while content and services revenue has increased. The company posted its latest earnings report on Wednesday, January 29, 2025. Xbox FY25 Q2 earnings in brief: Microsoft Gaming revenue declined 7% (down 8% in constant currency) Xbox hardware revenue down 29% Xbox content and service revenue up 2% Xbox Cloud Gaming logged 140 million hours of engagement PC Game Pass subscriptions are up 30% Compared to the last quarter,