Xbox hardware sales are, suffice it to say, in a bit of a downward spiral. This probably doesn’t come as a shock to most, but it wasn’t really put into perspective until this week, following Microsoft’s latest earnings call. Microsoft is still planning to continue putting out Xbox hardware, but the company has continued with a drastic shift in how it’s approaching the console space.
Earlier this week, a report claimed that the next-gen Xbox is actually going to be a high-end PC running on Windows with an Xbox UI layered on top. This decision may very well have been made due to how things have been going in terms of hardware sales. It’s also a continuation of the Xbox Everywhere strategy that more or less began with the rollout of Xbox cloud gaming. A feature that allows users to stream Xbox titles across various screens, including phones, smart TVs, and PCs. In other words, Xbox is not the same as it used to be. Gone are the days when, if you wanted to play Xbox games, you’d have to buy an Xbox console. With the most recent figures of the brand’s hardware sales, it’s easy to see why.
Xbox hardware sales for Q1 2026 are down by 29% year-over-year
A decrease in hardware sales by 29% is by no means a small amount. That being said, it might not be that bad if this were the first time sales had dipped. However, the declining hardware sales have been a trend for Xbox for basically the entire past year. As reported by The Verge (via Microsoft’s earnings call), hardware sales were down for Q4 2025 by 22%, while the first two quarters of 2025 each saw a dip of 29%. It’s a worrying trend that, for better or worse, has caused Microsoft to make some changes to what Xbox is and how it plans to increase revenue.
These numbers are likely at least part of Microsoft’s decision to increase the price of Xbox Series X hardware across the globe. For reference, the Xbox Series X now starts at a price of $599.99. This is for the 1TB model with no disc drive. If you want the disc drive, it’s $649.99, and the 2TB version costs $799.99. A full $50 more than Sony’s 2TB PS5 Pro. Microsoft also more recently increased the price of Xbox Game Pass Ultimate, pushing the monthly subscription cost up to $29.99 from its previous $19.99 price tag. Everything Xbox is more expensive, and that likely isn’t changing, since the next-gen console is going to be a “very premium and high-end” experience.
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