Sony and Microsoft both recently shared their financial results for the quarter ending 30 June 2026 – and neither company performed well.
Operating income for Sony’s Games and Network Services division grew by 37% year-on-year.
While this sounds great, the main reason for this increase in operating income was US tariff refunds.
In contrast, sales income was flat, increasing by only 0.6%.
According to Sony’s results, first-party game sales volumes declined from 6.9 million to 6 million units.
Total first-party software sales were also very flat – increasing slightly from 65.9 million to 66.1 million units.
One positive for Sony was that network services increased by 21% year-on-year, reaching the $1 billion mark.
Monthly active users were up to 125 million in June – a 2% year-on-year increase – but total playtime declined by 4%.
These flat earnings come at a time when Sony is under fire for its decision to kill physical discs from 2028.
The online response was extremely negative, even sparking gamers to organise a PlayStation blackout from 23 to 30 August.
#PSBlackout, as the movement is known, encourages gamers to not turn on their PlayStation consoles during the blackout period.
Xbox’s bad quarter
While PlayStation’s performance overall could be described as stagnant, Xbox had a definitively bad quarter.
In Microsoft’s latest results, Xbox revenue was down 7% for the full year – and 10% for the latest quarter.
Hardware revenue also dropped 29% because of lower console sales volumes – with the lone positive being growth in the Game Pass service.
Microsoft CEO Satya Nadella acknowledged that the Xbox business is in a restructuring phase, but believes there is light at the end of the tunnel.
“We are making the necessary decisions required across our content portfolio, platform, and operations to reset the business for long-term growth,” said Nadella.
“We have the best IP in the industry, and talented studios around the world, and believe we can bring these strengths together and expect to return the business to growth in fiscal 2027.”
Nadella’s comments follow a tumultuous news cycle for the Xbox business unit.
Earlier this month, as part of broader Microsoft job cuts, Xbox CEO Asha Sharma announced a massive round of layoffs.
Around 3,200 job cuts were announced for the next 12 months – 1,600 of which were immediate.
The company is also offloading four studios: Compulsion Games, Double Fine, Ninja Theory, and Undead Labs.
“Our business today is not healthy. We are operating at margins that are 3–10x lower than comparable platform and publishing businesses,” said Sharma.
“And now the industry is facing the most severe hardware crisis in its history. We must reset Xbox.”
Sharma has a two-point plan for Xbox – bring it back in line with Sony and Nintendo by the end of 2027, and become the leading gaming brand by the mid-2030s.
To achieve this, the studio will focus on its most powerful franchises and titles – including a heavy investment in Minecraft.
“We will build long-term plans for our biggest franchises across film, television, consumer products, sponsorship, live experiences, and form new partnerships globally, including China,” she said.
Sharma also emphasized a great focus on the lucrative casual and mobile gaming markets.
Loading ...
