Microsoft is canceling its Perfect Dark and Everwild games as part of sweeping cuts to its Xbox division. Matt Booty, Xbox president of game content and studios, revealed that Microsoft will be closing The Initiative, the studio behind Perfect Dark, in an internal memo to Xbox employees today.

Speaking on an accompanying earnings call, as reported by Game Developer, Microsoft CEO Satya Nadella said that Xbox Game Pass’s annual revenue totaled just under $5 billion, with 500 million active users, and “nearly” 40 games in development. He added, “We surpassed over 500 million hours of gameplay streamed via the cloud this year.”

Xbox Game Pass records almost $5 billion in annual revenue. Microsoft reports better-than-expected fourth-quarter earnings despite a bunch of layoffs in recent months. The company also revealed that it’s building a bunch of comprehensive AI products and tech stack at a massive scale.

Microsoft reported its latest 2025 quarterly earnings results Wednesday. The tech company's gaming-specific sales reached $5.5 billion for the three-month period which ran April 1-June 30, up 10% from the $5 billion in the comparable 2024 quarter.

Xbox revenue is up again for Microsoft's fourth quarter, with first-party sales and Xbox Game Pass driving growth.

It's another quarter of diminishing hardware revenue for Xbox, despite a strong overall quarter for Microsoft. Microsoft’s latest earnings report showed strong beats in terms of revenue and EPS, but that doesn’t mean it was entirely good news for the company and its many subsidiaries.

Investors in tech giant Microsoft (MSFT) received good news on Wednesday when Q2 2025 sales data for Sony’s (SONY) PlayStation platform was released. This sales data included the 10 best-selling games on PlayStation consoles during the quarter.