Too much supply and not enough demand
Microsoft has revealed its financial results for the third quarter of fiscal 2014. During an investor call, the company reported that there was a gross revenue of $20.4 billion for the period of January 1 to March 31, 2014 with a net income of $5.66 billion, Gamasutra reported. While the Xbox One was not the primary topic of discussion, implications were made that Xbox One production might cease or slow down in the coming months.
According to Microsoft, 1.2 million Xbox One consoles were shipped globally in addition to 800,000 Xbox 360s within the third quarter. Last week, Microsoft had announced that five million Xbox Ones had been sold to retailers but didn’t provide any numbers as to how many of those consoles were sold to consumers.
While the Xbox One has seen impressive sales numbers, Microsoft revealed back in January that three million units had been sold to consumers, there are units just sitting on store shelves. To deal with the inventory surplus Microsoft CFO Amy Hood said, during the investor call, “We do expect to work through some inventory in Q4.”
In that same call, however, she also referred to, “channel inventory drawdown for Xbox consoles” which could mean a halt to production or slowdown of production until the stock currently sitting on shelves has been sold by retailers.
But will Microsoft slow or halt production of its Xbox One console so that retailers can sell through its inventory? Sound off in the comments below!