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Asha Sharma Insists There’s ‘More Demand Than Consoles Available’ as Xbox Hardware Sales Continue to Plummet
Xbox chief executive Asha Sharma says console sales are limited by supply, with demand exceeding the number of consoles available. Her comments came as Microsoft reported a 14% year-on-year fall in Xbox hardware sales, underscoring the challenge facing the business ahead of the holiday season.
For the three months to 30 September 2026, Xbox revenue fell 2% to $5.379 billion, while content and services revenue also declined 2%. Microsoft said weaker third-party content and Game Pass revenue were partly offset by growth in its own games; PC revenue grew by double digits. Sharma said Xbox’s profit margin improved and that Microsoft was expanding its refurbishment programme, while higher console prices and component shortages add pressure before the expected interest around Grand Theft Auto 6.
In short
- Xbox hardware sales fell 14% year on year.
- Sharma says supply cannot meet console demand.
- Xbox revenue was $5.379 billion for the quarter.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Sharma’s account may reflect genuine supply constraints: component shortages and higher costs can limit how many consoles Microsoft can produce, even when customers want more. Improving margins and expanding refurbishment could help meet demand and support the business as interest in major releases grows.
The case against
The reported 14% annual fall in hardware sales, alongside declines in Xbox and content and services revenue, gives reason to question whether limited supply is the main constraint. Weaker third-party content and Game Pass revenue suggest that customer demand, pricing or the appeal of the wider Xbox offer may also be affecting sales.
Explained simply
Xbox is Microsoft’s video-game business, which sells Xbox consoles and games and subscriptions such as Game Pass. Its results depend on hardware sales as well as money from games and online services, including games made by other companies.
Asha Sharma leads the Xbox business. Microsoft also owns the studios that make its games, and competes with other gaming platforms for players and spending. Xbox’s sales matter to Microsoft’s wider entertainment business, while console prices, component supplies and the range of available games can affect what players buy.
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