Console supply chain difficulties are expected to continue throughout 2022, according to Xbox CFO Tim Stuart. “The supply chain environment could remain rocky through 2022 and the holiday season,” the exec explained in an investor call this week.
According to Stuart, issues are arising from two primary areas. The first comes from having limited supplies to manufacture consoles — a problem which actually favors the Xbox Series S, he said. The second is “elevated logistics pricing pressuring margins.”
Supply chain problems have been plaguing each of the big three console manufacturers. Sony originally forecast that it would sell 22.6 million PlayStation 5 consoles during the current financial year, but it has since reduced that number to 18 million. In the financial report for its most recent fiscal year, Nintendo also showed a dip in Switch console sales due to the semiconductor shortage.
Although Microsoft itself doesn’t publish the sales numbers for its Series X|S line, the console has recently been outselling its longtime rival in markets like Japan and the UK. This may be due to the Series X|S being easier to obtain than the PS5, suggesting that perhaps Microsoft is navigating the supply chain challenges slightly better.
Microsoft’s Xbox division reported $16.28 billion in revenue for the calendar year 2021, marking the company’s most successful year yet. This profitability was attributed to the acquisition of ZeniMax/Bethesda, as well as the continued success of GamePass. With Xbox’s upcoming buyout of Activision Blizzard in the works, as well as big titles like Starfield and Diablo IV still on deck, it looks as if the company will continue to ride this momentum into 2023.
