Xbox CEO Asha Sharma stated that sales of Xbox Series consoles “remain constrained by supply,” and that the division is “working hard to get more consoles into players' hands.”
Microsoft's financial report for the first quarter of fiscal year 2027 shows that Xbox Content and Services revenue decreased by 2% year-over-year, while Xbox hardware revenue dropped by 14%. Following the report's release, Sharma emphasized on social media that Xbox's “operating margin” had “improved.”
She also mentioned that Minecraft and World of Warcraft: Infinite set records this quarter, highlighting double-digit growth in PC platform revenue, while celebrating the critical acclaim received by Call of Duty: Modern Warfare 4.
She also acknowledged in her post that Xbox hardware revenue had declined further.
“Console sales remain constrained by supply, with demand exceeding the number of consoles we can provide. We are working hard to get more consoles into players' hands, including by expanding our refurbished console program. We are making progress, but there is still a lot of work ahead.”
Although retailers in some regions still have Xbox Series X|S units in stock, others have struggled to replenish inventory in time, leaving consoles sold out.
At the time of writing, there are only three weeks left until the release of GTA6 on November 19, 2026. Supply issues for Xbox could affect its profitability.
In his prepared remarks regarding first-quarter earnings, Microsoft CEO Satya Nadella highlighted the potential impact of GTA6 and the recently released Call of Duty: Modern Warfare 4.
“We are entering the holiday season with one of the strongest lineups of first-party and third-party games in years. This includes Modern Warfare 4, which launched last week. It has received the best reviews for the Call of Duty series in over a decade; additionally, GTA6 will be coming to Xbox next month.”
Earlier in October 2026, reports indicated that Xbox attempted to alleviate supply concerns by emailing customers who hadn't used their Xbox consoles for some time, encouraging them to trade in their consoles at Best Buy.