Xbox slips as Microsoft’s cloud and AI engine accelerates

Microsoft’s Q4 shows Xbox revenue down about 10% and hardware down 13%, while cloud revenue jumps 27% to $59.3B and Azure tops $100B, as CEO Satya Nadella frames a company-wide “reset” including layoffs and studio spinouts to return to growth by fiscal 2027. The company is also adjusting Xbox pricing and exploring ad-supported cloud gaming as it leans harder into AI and cloud initiatives.