3 minBusiness
Xbox revenue falls 2 percent as CEO blames console supply shortages
Xbox CEO Asha Sharma says console sales remain constrained by supply, but market data and industry analysts question whether stock is the main reason hardware sales have fallen.
Xbox CEO Asha Sharma has said that console sales remain constrained by supply, even as Xbox Series X|S is widely available at major US retailers such as Best Buy, Target and Walmart, as well as on Xbox's own website. Sharma made the claim on X while discussing the division's revenue in Microsoft's most recent financial quarter, which declined 2 percent year over year, compared with a 10 percent decline the previous quarter.
In her post, Sharma said the company's accountability margin improved and pointed to strong results elsewhere in the business. Minecraft and World of Warcraft Forever set records, Call of Duty had its most acclaimed release in more than a decade, and PC platform revenue grew by double digits. "Console sales remain constrained by supply, with more demand than consoles available," she wrote, adding that the company is working to get more consoles into players' hands, including through an expanded refurbishment program.
Sharma did not specify which markets or regions are affected by supply problems. Her statement also does not explain why consoles are described as widely stocked in US stores while demand is said to exceed availability.
The supply argument is not new. In June, Xbox chief strategy officer Matthew Ball said the company was producing the hardware as quickly as possible. "There is a severe limitation to how quickly we can do that, but it's not a question of appetite," Ball said at the time.
Analysts have been less convinced. Circana senior director Mat Piscatella expressed skepticism about Sharma's explanation on Bluesky, writing that the data he has seen does not suggest that stock has been the biggest driver of Xbox hardware performance. Xbox Series X|S hardware sales continue to fall in the US, setting new record lows for Microsoft's gaming brand. The decline follows a price increase for Xbox consoles in August.
The financial results come as Sharma pursues a broader "reset" of the Xbox business. That effort has led to the loss of roughly 1,600 jobs at Xbox, with more cuts planned in the coming months. It has also included projected studio closures, including Ninja Theory, and the independence of other studios such as Double Fine. Halo now falls under the Activision umbrella.
Sharma recently highlighted the launch of Call of Duty: Modern Warfare 4, saying the franchise has generated $40 billion in lifetime revenue. The past few days have also brought the departure of Xbox's first chief operating officer, Helen Chiang, who had been promoted to the role by Sharma only a few months earlier.
7
