Xbox leader Asha Sharma has stated that demand for Xbox consoles continues to exceed available supply, attributing console sales figures to ongoing supply constraints. These remarks follow Microsoft's latest quarterly financial report, which indicated a two percent year-on-year decline in Xbox revenue and a 14 percent drop in Xbox hardware sales, driven by a reduced volume of consoles sold.
Sharma, in a post on X, aimed to frame the situation positively by highlighting record performances from titles such as Minecraft and World of Warcraft: Forever, and noting Call of Duty's most acclaimed release in over a decade. She also reported double-digit revenue growth for Xbox on PC. However, she reiterated that console sales are "constrained by supply," with "more demand than consoles available." Sharma indicated that efforts are underway to increase console availability, including an expansion of the company's refurbishment program.
Microsoft CEO Satya Nadella echoed Sharma's sentiment regarding software successes during the company's earnings call, celebrating Minecraft's "record quarter" and World of Warcraft's largest beta in franchise history. Nadella also pointed to a strong first- and third-party holiday lineup, mentioning Call of Duty: Modern Warfare 4 and Grand Theft Auto 6 as key titles. Notably absent from his mentions was Gears of War: E-Day, despite its release date falling within the holiday period.
Microsoft CFO Amy Hood provided further financial context, noting that the overall dip in Xbox revenue was primarily due to decreases in third-party content and Xbox Game Pass subscriptions, a decline partially offset by growth in first-party content sales. These financial results emerge after Sharma had previously stated that the Xbox division was "starting to return to growth" following significant restructuring, which has led to over 1,800 job losses. Further layoffs are anticipated, alongside broader voluntary redundancy offers across Microsoft.
While Microsoft's cloud services have driven substantial revenue and profit gains for the company overall, these services have also drawn criticism. Calls to boycott Microsoft products have arisen due to their alleged use by the Israeli military, a stance that led the developer House House to refuse selling their game Big Walk on Xbox.