Microsoft’s latest financial results show that Xbox revenue declined during the most recent quarter. Xbox content and services revenue fell 10% compared with the same period a year earlier.

Xbox hardware revenue also decreased by 13% for the quarter, while total gaming revenue for the full fiscal year was reportedly down 5%. In contrast, Microsoft’s overall quarterly revenue rose by more than 31% year over year to approximately $133.75 billion.

The decline arrives as Microsoft restructures its gaming division. Recent changes reportedly include workforce reductions, impairment charges, and adjustments involving several internal studios.

The earnings report mentioned lower-than-expected costs connected to Microsoft’s voluntary retirement program. Those savings were partially offset by severance expenses and financial charges related to the Xbox business.

Microsoft also reported a $3.2 billion gain connected to its investment in Anthropic, the company behind Claude. Executives highlighted artificial intelligence as an important area of growth, with related revenue increasing 27% across the fiscal year.

The report claims Xbox is now being led by former Microsoft AI executive Asha Sharma following leadership changes within the gaming division. Microsoft has not yet outlined how its restructuring plans will affect future Xbox hardware, releases, or services.