Microsoft warns Xbox Series X/S consoles will still be “constrained by supply” in 2021

CEO possibly hints at an increased cloud focus to bridge the gap
  • Khari Taylor | 
    Jan 28, 2021
Microsoft Warns Xbox Series X/S Consoles Will Still Be “Constrained By Supply” In 2021 1

Microsoft’s Xbox Series consoles may not be fetching the astronomically high reseller prices that the PS5 Standard and Digital Edition consoles have been selling for online lately, but according to Microsoft they are in equally short supply and will remain that way for the time being (at the very least for Q2 2021).  During a Microsoft 2nd Quarter 2021 Earnings conference call this past Tuesday, Microsoft Chief Financial Officer Amy Hood reported that both consoles would be “constrained by supply” in the face of “significant demand”, citing gaming revenue increase of 51% and Xbox Hardware growth of 86% driven by the new console launch as well as lower price promotions on last generation consoles such as the Xbox One S and Xbox One X.

Microsoft CEO Satya Nadella was also in attendance and had some impressive numbers to share during his segment of the call.  Xbox surpassed 5 billion in revenue for the first time in Q2 projections, with the launch of the Xbox Series X and S proving to be the most successful in Microsoft’s history and the most devices ever sold by the company in a launch month, despite the supply shortages that Microsoft and rival Sony are currently enduring.  In an interesting follow-up to this statement, Nadella commented that “Game developers are benefiting too as they turn to us to reach more players and scale the games using the power of the cloud.”  Naturally, with xCloud existing as one of the three platform pillars of Microsoft’s gaming strategy (the other two of course being Console and PC), it’s expected that both Microsoft and third party developers would be doubling their collective efforts to bring even more content into this space, as it’s clearly been paying off (according to Nadella, Microsoft made more than $2 billion in revenue from third-party titles for the first time in Q2, after all).  Yet with Xbox Series X and S shortages could this also be a hint that Microsoft might even be looking to lean more heavily on its cloud technology in the short term to help make up for the supply shortfall of Xbox Series hardware? 

Project Xcloud And Xbox Game Pass Are Tying The Knot: Will This Be A Game-Changer? 3
Image Source: Xbox

Microsoft recently confirmed that its xCloud game streaming service will be coming to PC in beta form this spring, signaling that both console streaming as well as Cloud Gaming via Xbox Game Pass arriving on PC in the near future are now dead certainties, if the previous roll out of these services on Android are anything to go on.  As I previously suggested in a feature article covering the potential of xCloud last year, the increased horsepower, connectivity options, higher potential resolutions and larger screens of desktops and laptops are capable of providing a gaming experience more on par with that of today’s consoles.  In light of the continued worldwide supply constraints of both the Xbox Series X and S console, it’s quite possible that this beta could arrive at the perfect time, acting as a stop-gap to fill the hardware void for may gamers and allowing them to stream console-quality Xbox Game Pass experiences on their PC.  An overly “synergystic” prediction perhaps, but you never know.  Only time will tell.

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