Xbox's message after Microsoft's latest earnings call is that people want consoles and Microsoft can't make enough of them. Game Developer says that claim may clash with Microsoft's own results, and Kotaku notes some skepticism about it.
Xbox CEO Asha Sharma told Microsoft's investor call that console demand is higher than supply, then repeated the point on X, Game Developer reports. Kotaku quotes her post: "Console sales remain constrained by supply, with more demand than consoles available. We're working to get more consoles into players' hands, including through our expanded refurbishment program. We're making progress, with a lot more work ahead."
Xarmo couldn't check the call or the X post directly, so the figures and quotes here are attributed to the two outlets.
What the results show
According to Game Developer, Xbox hardware revenue fell 14 percent year over year this quarter, even though console prices have gone up. Xbox content and services revenue fell 2 percent, with declines in third-party content and Game Pass. Game Developer suggests the Game Pass dip may be a direct effect of the April price cut.
Game Developer says Sharma's case is that sales were lower because Microsoft couldn't manufacture or supply enough units, and that she pointed out the year-over-year decline had narrowed compared with the previous quarter. The outlet's view is that if demand were really outstripping supply, hardware revenue should be showing big gains.
Elsewhere in the results, Game Developer reports that Microsoft Cloud revenue reached $63.9 billion, up 30 percent year over year, and that cost of revenue in the Devices and Consumer segment "declined 8 percent driven by lower amortization of intangible assets from the Activision acquisition."
Can you actually find one?
Both outlets note the claim sits awkwardly with stock in the US. Game Developer says its cursory checks, locally and nationwide, didn't suggest the Series X or Series S were particularly hard to find in shops. Kotaku says you can frequently find consoles in stock on Xbox's website or through online retailers in the US, even if plenty of stores don't have them on the shelves.
Kotaku adds that the US isn't the whole picture: in large parts of the world Microsoft has seemingly failed to keep supplies up or has stopped serving the market entirely. Kotaku puts any global hardware shortage down to the AI-driven RAM crisis, which it says is forecast to get worse heading into 2027.
Game Developer offers another possible explanation for any demand spike: players buying ahead of big releases like Grand Theft Auto VI, or ahead of further price rises.
Refurbished consoles and trade-ins
Kotaku says the refurbishment programme Sharma mentioned is part of a push to increase supply before the holiday season and the launch of GTA 6. It also describes an email Microsoft sent to some owners who hadn't turned their console on in a long time, urging them to trade their Series X or S in at retailers such as Best Buy.
All of this comes during Xbox's reset. Game Developer reports that Xbox is cutting 1,600 jobs, with another 1,600 to go by July 2027, and says that while it may be too soon to judge, there doesn't appear to be a meaningful improvement in the numbers yet. Looking further ahead, Kotaku notes that Project Helix devices are reportedly due around holiday 2028, and that a recent report put the next console at between $1,200 and $1,800 if Microsoft doesn't subsidise it.
Mason's take: This is my reading, not a fact: "constrained by supply" is doing a lot of work here. When hardware revenue is down 14 percent after price rises and reporters can still find stock in the US, it's hard not to read at least part of that drop as softer demand. The refurbishment push and the trade-in emails make sense either way, because every working Xbox in an active player's hands is someone who might buy GTA 6 on that platform.
Reporting notes