Xbox CEO Asha Sharma said demand for the company’s consoles exceeded supply during Microsoft’s latest investor call, arguing that lower sales reflected an inability to manufacture or provide enough units. She also said the year-over-year decline had eased compared with the previous quarter. Sharma later reshared her comments on X.
Microsoft’s results, however, show Xbox hardware revenue fell 14% year over year for the quarter, despite higher console prices. The figures have prompted questions about how a supply shortage would fit with the reported performance. The source also notes that Xbox Series X and Series S consoles did not appear especially difficult to find in local or nationwide retail checks, while acknowledging that availability can vary.
The report raises the possibility that some consumers may be buying consoles ahead of future price increases, potentially in anticipation of high-profile releases such as Grand Theft Auto VI. It does not establish that this is driving demand.
The results are the first major quarterly report since Xbox’s reset, which aims to return the division to profitability and includes job cuts. The source says it may be too early to assess the effects of those changes. Xbox content and services revenue was down 2% year over year, with declines in third-party content and Game Pass; the report suggests the latter may be linked to an April price cut.
Microsoft also said costs in its Devices and Consumer segment fell 8%, driven by lower amortization of intangible assets from the Activision acquisition. Elsewhere, Microsoft Cloud revenue reached $63.9 billion, growing 30% year over year, while cloud and AI initiatives supported the company’s overall results.
Sources: Game Developer.