Microsoft may halt Xbox One production as inventory piles up

Xbox One Production Update

Although the Xbox One’s success has been repeatedly overshadowed by the dominance of the PlayStation 4, Microsoft CFO Amy Hood hinted in a recent earnings call that market saturation for the new console might be approaching sooner than expected. Gamasutra reports that Microsoft shipped 1.2 million Xbox Ones in the third fiscal quarter (January 1st – March 31st), which contributed heavily to the 41% year-over-year increase in revenue for Microsoft’s Devices and Consumer Hardware division. Unfortunately, it appears that those millions of Xbox One consoles aren’t exactly flying off the shelves.

During the earnings call, Hood said that Microsoft “expect[s] to work through some inventory in Q4 [April 1st – June 30th],” mentioning “channel inventory drawdown for Xbox consoles.” From Gamasutra’s perspective, Hood’s statement implies that Microsoft may slow or even stop Xbox One production altogether until demand picks up. We know that the company has shipped 5 million consoles to retailers since launch, but Microsoft hasn’t been as forthcoming with actual end user sales data.

It’s still too early to tell whether or not the Xbox One has plateaued at its $500 price point, but it sounds like Microsoft is not entirely optimistic about growing its market share extensively over the next few months. Of course, that could all change if Microsoft makes a splash at E3 in June.

Microsoft did not immediately respond to a request for comment.

Source:
Gamasutra
blog comments powered by Disqus