Xbox Console Sales Fall 14% as Microsoft Says Demand Outstrips Supply

Xbox hardware sales fell 14 percent in the latest quarter, and the head of Xbox says more people want consoles than the company can supply.

Microsoft announced its results for the quarter ended 30 September 2026 on 28 October 2026, from its headquarters in Redmond, Washington. In those results, Xbox revenue fell 2 percent year on year. Hardware, the consoles and their sales, fell 14 percent, which Microsoft linked to a lower number of consoles sold. Eurogamer reported the figures and the comments that followed.

Asha Sharma, chief executive of Xbox, said there is more demand than consoles available. She said console sales remain held back by supply. Microsoft is working to get more machines into players' hands, she said, including through an expanded refurbishment programme, which repairs and resells used consoles.

Microsoft's chief financial officer, Amy Hood, gave the reasons behind the drop in Xbox revenue. She said lower revenue from third-party content, which means games made by outside publishers, and from Xbox Game Pass, a monthly subscription that gives access to a library of games, drove the decline. Growth in first-party content, games made by Microsoft's own studios, partly offset it.

Across the whole company, Microsoft reported revenue of US$92.3 billion for the quarter, up 19 percent. Operating income, the profit left after running costs, reached US$45.9 billion, up 21 percent. Most of the company's growth came from its cloud and business software divisions, not from games. The company's earnings release gives the full breakdown.

The gaming figures come against a difficult spring. In June, Bloomberg reported that Microsoft's Xbox division planned significant job cuts as Sharma reshaped the unit. Around the same time, Sharma said the gaming business faces declining sales and thin profit margins, meaning little profit kept from each sale.

For players, the practical question is how quickly supply catches up. Microsoft has not given a date for when more consoles will be widely available, and the company's comments so far point to the refurbishment programme as one route. Hood's remarks also suggest the subscription and third-party side of the business will need to recover for overall Xbox revenue to grow again.

What comes next will show up in Microsoft's next quarterly results.