KEY POINTS

  • Demand for the Xbox Series X and Xbox Series S is expected to outstrip supply heading into 2021
  • Xbox head Phil Spencer said shortages for the two consoles will continue "for a few months"
  • Analysts predicted the Nintendo Switch will beat Xbox Series X and PS5 and win the holiday console war

Microsoft is already apologizing to customers for the expected shortages in Xbox Series X and Xbox Series S stock this year and beyond.

Xbox boss Phil Spencer revealed in an interview on the "Dropped Frames" podcast that demand is expected to outstrip supply for the two next-gen consoles from Microsoft until next year. He warned that shortages will continue "for a few months" after the launch of the Xbox Series X and Xbox Series S in November.

"We know what our supply will look like basically for the rest of the year. We're going to have more demand than we do supply," Microsoft's executive vice-president for gaming said. "And I will apologize in advance to people for that."

"We saw it with pre-orders, how much energy there was, and we were basically out [of stock] in a couple of hours, which is unfortunate," he added. "I think we are going to live in that world for a few months. We're going to have a lot more demand than we do supply."

This is consistent with what Spencer previously said in interviews.

"I think demand is just going to outstrip supply of pre-orders. For us and PlayStation, I think that the manufacturing supply chain is going to dictate [market] share more than anything else," he told Kotaku two weeks ago.

The Xbox head also noted that even if the Xbox Series X becomes the bigger hit with early adopters when it launches on Nov. 10, the lower-priced, all-digital Xbox Series S will likely outsell its sibling in the long run.

Both the Xbox Series X and Sony's PlayStation 5 retail for $499 and are recording strong pre-order numbers. The Xbox Series S is selling at $299, while the all-digital version of the PlayStation 5 is priced at $399.

Mat Piscatella, a gaming industry analyst at the NPD Group, predicted earlier this month that both the PS5 and Xbox Series X will be among the hottest holiday gift items for the year and that "units will be tough to find with continued strong demand into 2021." 

But with the expected shortages of inventory for the new Sony and Microsoft consoles, Piscatella speculated that the Nintendo Switch will come out the winner in the holiday season battle and outsell PS5 and Xbox Series X.

Phil Spencer Xbox chief Phil Spencer has revealed that Microsoft’s video game unit is shifting its focus toward software. Photo: Reuters/Kevork Djansezian