Coronavirus effect: Microsoft not worried about Xbox Series X production but worried about demand

In a recent interview with CNBC, Microsoft CEO Satya Nadella said, “On the supply side we are getting back on rails.” He said this in response to the question “whether Microsoft would be able to deliver later this year certain products it had promised before COVID-19 took hold, like new Surface devices and a revamped Xbox gaming console”. The new Xbox Series X will be manufactured in China, a country that has started recovering from the COVID-19 pandemic. However, there are many countries all over the world, where the virus is gravely affecting the economy. What will affect Microsoft's hardware including the upcoming surface devices and the Xbox Series X is the demand. He says, "what happens in the United States, in Europe, in other developed markets around the demand side of this going forward." Put simply, Microsoft may be able to produce enough hardware, but will the demand be enough?

The COVID-19 pandemic has put the global economy on a backfoot and while the governments of various nations are doing the best they can to maintain economic sustenance, there is no denying that that business, profits, consumer spending, etc. will be gravely affected. Since the upcoming console is expected to be priced higher than the industry norm due to the hardware under the hood, it is possible that the console may not sell as well as Microsoft hopes, initially at least. 

Another thing to note is that Microsoft has committed its exclusive games to be on both the Series X and Xbox One family of consoles for 1 year at least. So there is little reason for one to invest in the new hardware on day 1. 

Microsoft may need to come up with some enticing offers to make the new console a must-have, this is apart from the specifications, where we know the console is a beast. Microsoft has not only revealed the look of the console and the controller that one will get with it, but has also given us a deep dive into the hardware specifications of the console. You can read about the specifications of the console here. 

Sony has also given gamers a deep dive into the specifications of the console and the new controller that will come with it but hasn’t revealed the look of the console yet. You can see how the PS5 compares to the Xbox Series X here. 

According to analysts, the Coronavirus would need to "last through June" in order to affect the launch of the Xbox Series X or PlayStation 5. You can read more about that here.

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