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Xbox Series X: Microsoft Appears To Be Facing Limited Supply [Tech4gamers]

DrFigs

Member
The article doesn't go into the reason for this.

The Series X supply is limited because of the wafer distribution for Series S. To ensure a high Series X supply, Microsoft will also have to produce a lot more Series S (up to 3 Series S for each Series X).

Series S isn't selling as fast as Microsoft anticipated, and Series X is in relatively higher demand, that leaves Microsoft with 2 options:
  1. Make additional Series S consoles and keep them on the shelves. That'd give them enough Series X to meet the demand, but the excess Series S will also mean a higher operating loss.
  2. Do not make additional Series S consoles, which would keep the cost low, but it also means that there would be a limited Series X supply (which is what we're seeing now).
I'm not understanding why they would need to make more series s consoles to improve supply of series x.
 

Brucey

Member
Funny how production was fixed in time. Also, I would imagine MS would also want to produce as many consoles as they can, no corp would like to see shelf's bare, unlesss they're holding back supply for a certian time of the year or in the run up to a massive big game release.
They also wouldn't want a situation like Xbox one release where they had literally piles of unsold consoles on stores. I think MS ended up repackaging a bunch for the Titanfall launch?
 

ReBurn

Gold Member
A limited supply of customers is what Microsoft is facing. Nobody wants that shit. The president said so, and demonstrated the fact himself quite eloquently.
Zzz Ok GIF by Jim Gaffigan
 

Topher

Gold Member
Are you ok? 🤔

The PS5 bogey man keeps him up at night.

Scared Spongebob GIF
Sony Ps5 GIF


A limited supply of customers is what Microsoft is facing. Nobody wants that shit. The president said so, and demonstrated the fact himself quite eloquently.

I think those of us who have followed the back and forth of the ABK acquisition in the OT have learned not to trust anything that has been said from any of the execs or their lawyers. They will toss their own grandmothers under the bus if it helped their cause.
 
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splattered

Member
Well i can't disagree, the PS5 is one of the ugliest consoles i've ever owned. I can't believe they actually approved and shipped it that size and configuration. Really wanted to wait for a slim version but got the ragnarok bundle for christmas so is what it is.
 

Alebrije

Member
Microsoft does not care about hardware, they are a software company and their bussiness model is based on Gamepass no consoles...
 
Well i can't disagree, the PS5 is one of the ugliest consoles i've ever owned. I can't believe they actually approved and shipped it that size and configuration. Really wanted to wait for a slim version but got the ragnarok bundle for christmas so is what it is.

Probably because they wanted to make a ton of them. That can explain a lot of the systems design.
 
At this point Microsoft has enough Series S out there to were they can afford to temporarily stop production

So you're in a roundabout way finally admitting we were right about Series S demand being low relative to supply. The pricing discounts since Summer of last year, the heavy sales promos during Black Friday and Christmas holidays, the systems still selling at the sales prices post-holidays in certain regions.

I remember you were vehemently against this, but given all of the circumstantial evidence over the past few months it's nice to see even you have accepted the notion surrounding Series S demand (relative to supply).
 
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Topher

Gold Member
Let's talk about demand for moment. When demand was at its peak there wasn't a PS5 or an XSX to be found anywhere. Not online and certainly not in stores. So now we have a situation where anyone can absolutely buy an XSX if they want one but it just isn't as readily available in stores. So it seems demand is certainly outpacing supply, but the amount of supply seems to be in question.

I think the crux of this debate is really about sales. Are Xbox sales being hindered by a lack of supply? If people are expecting to walk into a store and buy Xbox and not finding them then yeah, clearly Xbox sales are taking a hit. How much of a hit is unknown. But again, units are available if one takes time to look so demand certainly isn't overwhelming. I posted yesterday that I could buy an XSX at a local store. There were two units available and now there is one left.

h9ko73J.png


I should also say that this is one of three stores in Atlanta metro area that have stock out of a couple dozen. That's not a lot, but it seems like they are not exactly flying off the shelf and at the same time, slow to be replenished.

Like I said, demand is outpacing supply but I think the problem is more likely on the supply side. I also wonder how much swapping the regular console unit out with bundled units affected the supply chain. Same question could be asked of PS5 bundles last year.
 
Their software game is far behind their hardware game.

And, of course, they care about hardware. The majority of their revenue depends on it.
MS has the most first party studios now and continuing to increase it with the Activision/Blizzard deal.

Wouldn’t be surprised if MS buys out Ubisoft next.
 

Topher

Gold Member
Microsoft does not care about hardware, they are a software company and their bussiness model is based on Gamepass no consoles...

No, it isn't. Only 10-15% of game revenue is from Game Pass and Phil Spencer doesn't expect that to change.
 

Heisenberg007

Gold Journalism
Let's talk about demand for moment. When demand was at its peak there wasn't a PS5 or an XSX to be found anywhere. Not online and certainly not in stores. So now we have a situation where anyone can absolutely buy an XSX if they want one but it just isn't as readily available in stores. So it seems demand is certainly outpacing supply, but the amount of supply seems to be in question.

I think the crux of this debate is really about sales. Are Xbox sales being hindered by a lack of supply? If people are expecting to walk into a store and buy Xbox and not finding them then yeah, clearly Xbox sales are taking a hit. How much of a hit is unknown. But again, units are available if one takes time to look so demand certainly isn't overwhelming. I posted yesterday that I could buy an XSX at a local store. There were two units available and now there is one left.

h9ko73J.png


I should also say that this is one of three stores in Atlanta metro area that have stock out of a couple dozen. That's not a lot, but it seems like they are not exactly flying off the shelf and at the same time, slow to be replenished.

Like I said, demand is outpacing supply but I think the problem is more likely on the supply side. I also wonder how much swapping the regular console unit out with bundled units affected the supply chain. Same question could be asked of PS5 bundles last year.
Yes, it's not entirely on the supply side.

When EU sales charts were released recently, the discussion of Series X supply issues came up. I ran a quick search for different Amazon stores worldwide, and Series X was available in all of them.

Except Series X is not supply constrained. It's available almost everywhere.
Both Series X and Series S are readily available. The problem now is the lack of demand, which is why they are not selling as many consoles, and which is why the hardware revenue is also down.

Is the supply perfect? No, I don't think so. But this issue isn't entirely about supply because Series X and S are available in most stores. It's a combination of demand (bigger) and supply (smaller) issues.
 

begotten

Member
This must be a US issue because in Europe the Series X is available and has always been pretty much. The PS5 on the other hand is still difficult to track down, but it's gottaen much better lately.

Must be. I'm not in the US or Europe. Where I am Series X/S has always been available over the last 2 years - but finally in 2023 I'm seeing Ragnarok bundles in store at multiple retailers.
 
In the right sceptre S is an absolutely brilliant solution. It's tiny uses less than half the power of its bigger cousins and cheaper to buy. In a kids room connected to a HD ready old TV, or as in my case in the living room connected to an older 40 inch TV in a small TV cabinet. The series x or Ps5 would not even fit in and my 8 year old son plays it mainly. Though I play it too when I can't be bothered going up to the office to play on the Series X or PC.

I think if it's not selling its due to Microsofts lack of marketing, in the UK I never see any adverts for Xbox but playstation is all over the place, in the cinema, on the side of busses, on the side of roads on bill boards and bus stops. Xbox is neve advertised. If people knew what the S was and game pass then I'm sure they would be popular, also my kids watches a fair bit of crap on YouTube and the people in those videos are all about playstation.
 
Lots of demand guesses here, but if you have Xbox France coming out and saying there wouldn't be enough supply worldwide for demand, they clearly have seen numbers that would make them obligated to make that statement.

Some areas might have some X, but that applies to PS5 over time as well, taking small snippets is silly, you have to look at the whole picture to see if the X was generally in stock across retailers, not just some the 5 blocks around your house, and the answers is in many areas there were places where there was low or no stock that would have otherwise.

Now, PS5 has resolved, or is resolving that problem based on what region you are in as a whole, but Xbox has not. Not even in it's strongest country.

Also people are mentioning a few online retailers and assuming they have infinite supply and anyone can order from that retailer to get a console if they want it which isn't true. Microsoft direct for example has been sold out a few times, even though right now it looks like anyone can just "go and buy one" after a few thousand sales it will sell out again.

Then you have retail which many millions globally still buy consoles from which are almost never taken into consideration because people believe for some reason people don't buy things offline despite several years in a row of increase sales retail sales especially during the holiday season.
 
I recently picked up a second series x from Very uk with no issues.

So I'm not sure what's happening in thee US.
It's the same in Australia. Both were hard to get in the lead up to Xmas, but Sony dumped a shit ton of PS5s for the Xmas period and they have been on store shelves ever since. XSX were still sold out over the Xmas period and are still hard to get ever since.
 

PaintTinJr

Member
Lots of demand guesses here, but if you have Xbox France coming out and saying there wouldn't be enough supply worldwide for demand, they clearly have seen numbers that would make them obligated to make that statement.

Some areas might have some X, but that applies to PS5 over time as well, taking small snippets is silly, you have to look at the whole picture to see if the X was generally in stock across retailers, not just some the 5 blocks around your house, and the answers is in many areas there were places where there was low or no stock that would have otherwise.

Now, PS5 has resolved, or is resolving that problem based on what region you are in as a whole, but Xbox has not. Not even in it's strongest country.

Also people are mentioning a few online retailers and assuming they have infinite supply and anyone can order from that retailer to get a console if they want it which isn't true. Microsoft direct for example has been sold out a few times, even though right now it looks like anyone can just "go and buy one" after a few thousand sales it will sell out again.

Then you have retail which many millions globally still buy consoles from which are almost never taken into consideration because people believe for some reason people don't buy things offline despite several years in a row of increase sales retail sales especially during the holiday season.
How is the used market price tracking the shortages in your opinion?

Of my friends that have had the series X, 2 have sold, although the first seller rebought the second sellers, 1 has kept his, but only plays Destiny on PS5 AFAIK, and my other friend that I usually game with locally every few months is just about to sell his after he got VR2 a day ago. Is he likely to get a good price now, with the shortages?
 
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How is the used market price tracking the shortages in your opinion?

Of my friends that have had the series X, 2 have sold, although the first seller rebought the second sellers, 1 has kept his, but only plays Destiny on PS5 AFAIK, and my other friend that I usually game with locally every few months is just about to sell his after he got VR2 a day ago. Is he likely to get a good price now, with the shortages?

I would wait a month when it's more clear how the Forza bundle is impacting supply.
 

Thirty7ven

Banned
So the theory is that series s demand is absolutely awful, and MS can’t make more Series X because of the wafer situation? And why haven’t they resolved that, considering it has been going on for a long time, and how is it that MS would rather be outsold 2 almost 3 to 1 by the end of 2023 instead of fixing the production?

It seems awful business to just ignore the demand. Theories about “waiting for Starfield” are truly proper bonkers.
 
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So the theory is that series s demand is absolutely awful, and MS can’t make more Series X because of the wafer situation? And why haven’t they resolved that, considering it has been going on for a long time, and how is it that MS would rather be outsold 2 almost 3 to 1 by the end of 2023 instead of fixing the production?

It seems awful business to just ignore the demand. Theories about “waiting for Starfield” are truly proper bonkers.
They're redesigning the X to fix these issues. The S will be phased out and become streaming console like the Xbone S edition, which made way for the SAD. Microsoft phased out 360 arcade and eventually core to replace them with elite and slim models.

Microsoft just need to clear the channels of X before the new redesign hits.
 

Thirty7ven

Banned
They're redesigning the X to fix these issues. The S will be phased out and become streaming console like the Xbone S edition, which made way for the SAD. Microsoft phased out 360 arcade and eventually core to replace them with elite and slim models.

Microsoft just need to clear the channels of X before the new redesign hits.

You are out of your mind if you think series s will be phased out or become a streaming box. Dev wills be supporting that thing till the end of the generation sorry to tell you. That target spec is going nowhere. It can get a redesign sure.
 
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You are out of your mind if you think series s will be phased out or become a streaming box. Dev wills be supporting that thing till the end of the generation sorry to tell you. That target spec is going nowhere. It can get a redesign sure.
Why wouldn't it be phased out? When the HDD add-on become an expense for MS they phased it out. They phased out the S to make way for the SAD. What makes you believe they won't phase out the S?

As for it becoming a streaming console, the 'One' family of consoles are quickly heading down that route. Some games from gamepass play locally, but more and more are played via cloud. The S will go the same way. It make take another 12, even 24 months, but eventually games will only be playable via the cloud.

If you don't think Microsoft will phase consoles out, you're ignoring the OG Xbox, 360 arcade and core and Xbox one and Xbox one S. Not to mention the 1x was almost an entirely new console, save for the CPU.
 
So the theory is that series s demand is absolutely awful, and MS can’t make more Series X because of the wafer situation? And why haven’t they resolved that, considering it has been going on for a long time, and how is it that MS would rather be outsold 2 almost 3 to 1 by the end of 2023 instead of fixing the production?

It seems awful business to just ignore the demand. Theories about “waiting for Starfield” are truly proper bonkers.

The S is selling fine, they are using the S to make up for the lack of X, but that can only work to a certain extent because not everyone wants the S, which is weak and all-digital.

Microsoft didn't decide to be outsold. I'm not sure how you came to that logic to be frank. Microsoft has just been having issues getting X's produced. They were expected to be in a better place, but before the holiday seasons tarted they came out and said there would not be enough supply to meet demand.

I think it doesn't make much sense to believe MS is "ignoring" demand instead of just not being able to meet it for some reason, whether that's something that was overlooked, some issue with the production facilities, incompetence, the cloud server theory, who knows, but they aren't doing it on purpose.

Why wouldn't it be phased out? When the HDD add-on become an expense for MS they phased it out. They phased out the S to make way for the SAD. What makes you believe they won't phase out the S?

As for it becoming a streaming console, the 'One' family of consoles are quickly heading down that route. Some games from gamepass play locally, but more and more are played via cloud. The S will go the same way. It make take another 12, even 24 months, but eventually games will only be playable via the cloud.

If you don't think Microsoft will phase consoles out, you're ignoring the OG Xbox, 360 arcade and core and Xbox one and Xbox one S. Not to mention the 1x was almost an entirely new console, save for the CPU.

What are you talking about?

They did not phase out the One S, the One S was the last Xbox standing, they discontinued the SAD and the One X before the Xbox One S because that was the best selling base model with the lowest price and has a disc-drive. Since 2020 the entire Xbox One family has been discontinued.
 
What are you talking about?

They did not phase out the One S, the One S was the last Xbox standing, they discontinued the SAD and the One X before the Xbox One S because that was the best selling base model with the lowest price and has a disc-drive. Since 2020 the entire Xbox One family has been discontinued.
Thanks for the clarification and helping my prove my point. TBH i get mixed up with S and SAD, both are shit. Shame about the 1x getting phased out, it was my favourite console last gen.
 
Thanks for the clarification and helping my prove my point. TBH i get mixed up with S and SAD, both are shit. Shame about the 1x getting phased out, it was my favourite console last gen.

They discontinued the One X because it was costly, and they could drop the price. Sold well for what it was, a refresh but after a few years it didn't make sense to keep that going. Plus, having One S made sense because that was the console people called "Xbox One" having Series S and Series X with a One S and and One X would probably cause confusion.
 
They discontinued the One X because it was costly, and they could drop the price. Sold well for what it was, a refresh but after a few years it didn't make sense to keep that going. Plus, having One S made sense because that was the console people called "Xbox One" having Series S and Series X with a One S and and One X would probably cause confusion.
Yeah. They still phased consoles out mid-generation is what my point was. That's not to dismiss your extra info, as it was appreciated. Just that there is precedent there for Microsoft to phase out consoles during a generation.
 
Yeah. They still phased consoles out mid-generation is what my point was. That's not to dismiss your extra info, as it was appreciated. Just that there is precedent there for Microsoft to phase out consoles during a generation.

Sony phases out consoles too, so did Nintendo, nothing really new.

I think his issue with your comment was you were assuming they would phase out the S for better X production or to replace it with an X digital, issue is iirc the S isn't actually interfering much with X manufacturing, so something else is causing the stock issues.
 
Sony phases out consoles too, so did Nintendo, nothing really new.

I wasn't talking about other companies, what they do is irrelevant.
I think his issue with your comment was you were assuming they would phase out the S for better X production or to replace it with an X digital, issue is iirc the S isn't actually interfering much with X manufacturing, so something else is causing the stock issues.
I never said that. S is interfering with X production because you get 4 Series S' to 2 Series X's. Which, from a manufacturing PoV is stupid. You never tie two unknown products to one production line.

The Series S will still be made but the Series X as we know it now is done. A new revised/refreshed/whatever-you-want-to-call-it version of the X will be released. If I was a gambling man, MS will make a series X without the disc drive (on the face of it) while doing a huge retooling under the hood.
 
I wasn't talking about other companies, what they do is irrelevant.

I never said that. S is interfering with X production because you get 4 Series S' to 2 Series X's. Which, from a manufacturing PoV is stupid. You never tie two unknown products to one production line.

The Series S will still be made but the Series X as we know it now is done. A new revised/refreshed/whatever-you-want-to-call-it version of the X will be released. If I was a gambling man, MS will make a series X without the disc drive (on the face of it) while doing a huge retooling under the hood.

That's what I'm saying iirc, they aren't on the same production line, as that issue as brought up before the console launched. Whether or things have changed or not is another thing.

As for being done I have no idea why you would think the X is "done" because they are still having supply issues?

You do realize a replacement for the X would require a whole new production process, new deals with factories, new passing of regulations, new negotiations with retailers?
 
That's what I'm saying iirc, they aren't on the same production line, as that issue as brought up before the console launched. Whether or things have changed or not is another thing.
Same Wafer IIRC.
As for being done I have no idea why you would think the X is "done" because they are still having supply issues?
Supply issues because they aren't supplying any more units, because they aren't making any more units
You do realize a replacement for the X would require a whole new production process, new deals with factories, new passing of regulations, new negotiations with retailers?
Yes. Just like they did with the 1x and it was the smartest move Microsoft made last gen. It was just 18 months too late. If the 1X had have dropped in early/mid 2016, it would have closed the gap between Xbox and PS4 considerably.
 
So the theory is that series s demand is absolutely awful, and MS can’t make more Series X because of the wafer situation? And why haven’t they resolved that, considering it has been going on for a long time, and how is it that MS would rather be outsold 2 almost 3 to 1 by the end of 2023 instead of fixing the production?

It seems awful business to just ignore the demand. Theories about “waiting for Starfield” are truly proper bonkers.

They would have had to commit to components in advance. The question is how far in advance have they committed to the Series S components? 3 months? 6 months? A year? Two years?

In 2020, Phil Spencer stated that he thought the Series S would outsell the Series X for the generation.

It would not surprise me if they doubled down on components for the Series S long term to get the most favorable pricing possible and shortest lead times. It's possible that they're tied into the Series S and pivoting to the Series X at increased levels is proving difficult since suppliers probably haven't accounted for the Series X components and their queues are already quite large with other items.

Basically, the Series X has to get back in line and the cost of expediting that would probably be cost-prohibitive.

Sony on the other hand, the Digital and Standard share the exact same components. Sony doubled down on the same production lines and same components, which is why they're able to deliver now. Sony already ordered the components for 20+ million units for this year. Microsoft probably ordered components for 12-15 million Xbox units, but the divide for that is probably 60-65% Series S. So that leaves at most 6 million Xbox Series X for the entire year compared to 20+ million PS5s... and with that same math, there could be as few as 4.2 million Xbox Series X for the whole year.

4.2 million vs 20+ million...

Meanwhile, you have a bunch of Series S that are sitting on shelves, making it look like no one wants the Xbox brand... it's bad. As a result they will probably shift more to xbox direct sales for Series S and just keep these in warehouses, but this also fits into why they are selling them for $240 dollars (and still not selling out).

Ultimately, they made the wrong bet, in a situation where people are buying 4KTVs and want the latest and greatest. When you're willing to pay 70 dollars for a video game, does 200 dollars really make that much of a difference in terms of getting a better overall product and enjoying those 70 dollar games? Maybe if the recession hits hard, we'll see a shift, but right now, this looks like one of Microsoft's worst moves in the last 25 years.
 
and they are buying 4Ktvs not because of options; literally, you can't buy 1080p TVs that easily. everything in the market is pushing 4Ktvs.

That has been a known value for years. What's worse is that if Sony comes out with a Pro version, Microsoft has to follow suit... Now they will have 3 models that they have to support. In the words of Geoge Constanza... "That was really a stupid thing."
 
Poor Series S demand also lends itself to poor demand for GamePass.

If they can't get people to drop down 240 just to get access to these games... people aren't that interested. This means they're approaching a ceiling on GamePass subscriptions.

I'd love to know their strategy to offload 7.2+ million Xbox Series S units. That's not a trifling amount. It's nearly as many units as the Dreamcast sold.

Ironic that the Series S is selling for less than a Dreamcast in September 2020 adjusted for inflation.

I wonder how long until they drop the price to 200 and if they do, if they ultimately discontinue the Series S. Or if they'll stand at 240 and just clear the warehouses over time.
 
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