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- Caroline Mercer via GameSpot - All Content
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Microsoft sülearn Xbox sales decline as strategy shifts and transparency questions grow
ReMicrosoft sülearn Xbox sales decline as strategy shifts and transparency questions grow
Xbox hardware revenue fell again year over year, with the company blaming supply constraints while analysts and critics question its explanations, strategy reversals and selective openness.
Xbox hardware revenue fell again compared with the previous year, according to Microsoft's latest financial reporting, and the company's own explanations for the slump are drawing skepticism. Xbox chief executive Asha Sharma has blamed constrained supply rather than weak demand. Whether that is the full story is difficult to verify, since the same figures could also reflect affordability problems or the strain that data-center demand places on the components consoles use.
The evidence on shelves is mixed. Xbox Series X and S consoles remain available through Microsoft's US online store with shipping, and reports have described stock in retail stores in several regions, including Belgium. At the same time, Costco has stopped carrying Xbox consoles, citing unspecified « business decisions ». Consoles now cost hundreds of dollars more than they did six years ago, a change that alone could explain weaker sales. Without more disclosure from the company, neither the supply explanation nor the affordability explanation can be proven.
The hardware numbers arrive against a broader reset in the Xbox business in 2026. Phil Spencer's departure was announced less than nine months earlier, and thousands of employees have been laid off, with several studios closed or divested. Game Pass has been overhauled multiple times, and a disc-to-digital program has launched. The next-generation project once known as Project Helix has been reframed as a « family of devices », while earlier ambitions to bring Xbox titles to rival platforms have been walked back. The company also announced a partnership with Kojima Physint and switched its branding from Xbox to XBOX.
Some of those changes have yet to show measurable results. Analyst Mat Piscatella says he sees no clear evidence of improvement so far. Call of Duty: Modern Warfare 4 was pulled from Game Pass, and franchise engagement has reportedly fallen. Sharma has set a long-term goal of reaching halfway to a daily-player target by fiscal 2030, a benchmark critics consider far from realistic given that recent Xbox margins have been reported at around 3 percent.
The company's openness has also become a point of contention. Microsoft once published Xbox 360-era sales figures, but it stopped disclosing such numbers during the difficult Xbox One years. Sharma and Matt Booty have recently shared internal reset emails that reveal selected facts about the business. Critics argue that this transparency is selective and shaped by social-media considerations rather than a full accounting of how the division is performing. The gap between what Microsoft chooses to say and what outsiders can independently verify remains at the center of the debate over Xbox's direction.
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