In announcing that 1.2m Xbox Ones were sold in the quarter ending March 31, Microsoft says supply has outstripped demand for the console.
Microsoft CFO Amy Hood has told investors that there will be a "channel inventory drawdown for Xbox consoles".
An inventory drawdown is the process of reducing the amount of available inventory of a product which, as Gamasutra points out, implies that Microsoft has produced more Xbox consoles than it is currently able to sell.
Hood added that the company “expects to work through some inventory” in the current quarter.
In other words, supply is outstripping demand, in which case Microsoft would halt manufacturing of Xbox consoles until demand once again overtakes available hardware supplies.
All of which means Sony sold just shy of 3m PS4s in the same period that Microsoft sold 1.2m Xbox Ones.
Microsoft’s Devices and Consumer Hardware Division, home to its Xbox operations, reported revenues of $1.97bn for the quarter and $8.19bn for the nine months ending March – both up from $1.4bn and $5.29bn respectively.
Overall Microsoft revenue for the quarter reached $20.4bn with profits of $5.66bn.