Xbox CEO Asha Sharma has stated that console sales for the Xbox Series X|S remain constrained by supply, with more demand than available units. This assertion comes as Xbox revenue declined by 2% year-over-year in the first fiscal quarter, a less severe drop than the 10% decline seen in the previous quarter. Sharma noted improvements in the division's accountability margin during this period.
Sharma highlighted successes such as record-setting performance for Minecraft and World of Warcraft, and Call of Duty's most acclaimed release in over a decade. PC platform revenue for Xbox also experienced double-digit growth. She mentioned efforts to increase console availability, including an expanded refurbishment program.
However, industry analysts have expressed skepticism regarding the supply constraint claim. Mat Piscatella, Circana's senior director, commented on social media that available data does not indicate stock limitations as the primary factor affecting Xbox hardware performance. This perspective aligns with ongoing trends of declining Xbox Series X|S hardware sales in the US, which have reached new lows for Microsoft's gaming division. These sales figures follow a period where Xbox increased console prices in August.
These financial results are part of a broader business "reset" initiative led by Sharma. This initiative has involved significant workforce reductions, with approximately 1,600 jobs eliminated at Xbox and further cuts anticipated. It has also led to projected studio closures and the move of some studios to independent operations. In a notable organizational shift, the Halo franchise is now under the Activision umbrella.
Earlier in the week, Sharma celebrated the launch of Call of Duty: Modern Warfare 4, a franchise that has generated $40 billion in lifetime revenue. The recent departures from Xbox leadership also include Helen Chiang, who served as Xbox's first chief operating officer, exiting the company only months after her promotion to the role by Sharma.