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Asha Sharma Insists There's 'More Demand Than Consoles Available' as Xbox Hardware Sales Continue to Plummet

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Asha Sharma Insists There's 'More Demand Than Consoles Available' as Xbox Hardware Sales Continue to Plummet

The boss of Xbox has insisted that sales of the console are constrained by supply and that there is “more demand than consoles available,” as Microsoft’s gaming business heads into the crucial holiday season.

Microsoft reported its FY27 Q1 results overnight, and the Xbox struggle is a familiar one despite new CEO Asha Sharma’s “reset” of the gaming business. During the three months ending September 30, 2026, overall Xbox revenue declined 2% year-on-year, although that’s an improvement on the 10% decline the previous quarter.

Xbox content and services revenue decreased 2% and 1% in constant currency, driven by “declines in third-party content and Xbox Game Pass, partially offset by growth in first-party content.” Xbox hardware sales, meanwhile, fell 14%. Xbox console sales, which have seen a number of price rises, have struggled for some time now, and Microsoft hasn't reported a sales figure for the Series X and S for years.

Despite the financial struggles, Xbox is still a huge business. It brought in $5.379 billion in the quarter ($5.508 billion the same quarter last year). But Xbox is a small piece of the overall Microsoft pie. To put Xbox into context, Microsoft’s cloud computing platform, Azure, brought in an eye-watering $33.1 billion this quarter alone — six times more than Xbox.

It’s worth noting that the recently released Gears of War: E-Day and Call of Duty: Modern Warfare 4 came after the end of Q1, so any revenue attributed to those games will be calculated in the current quarter’s results.


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