Microsoft CFO: Xbox console production may slow to clear stock

Microsoft’s CFO admitted in a conference call yesterday that the company might consider stopping production of Xbox consoles to catch up with demand, or stop having a large supply than what the market is asking for. This isn’t explicitly stated but its strongly implied. When you consider how many $50-$100 off deals we’ve seen on the Xbox One over the past 4 months then it starts to make sense.

Microsoft CFO Amy Hood said:

We do expect to work through some inventory in Q4.

Hood would go on to mention “channel inventory drawdown for Xbox consoles”, which paints the picture that Microsoft will either slow down or stop production on Xbox consoles in the near future so that they don’t have an excess of stock at retailers.

For reference, Microsoft shipped 1.2 million Xbox One units from January through March and 800k Xbox 360 units. Again Hood isn’t specifically stating that this is what they will do but this is generally what happens when things like this are spoken.

Another point of reference, it isn’t always bad when production is stopped or slowed down. Nintendo stopped GameCube production for six months in 2003 because they had an excess of stock at retailers. They would eventually start producing them again in September 2003 and bring with it a $50 price cut too.