Microsoft Corporation cut production of Xbox Series consoles on release to save chips for the Xbox Cloud Gaming cloud service. This is stated in a letter from the head of Xbox Phil Spencer (Phil Spencer), a copy of which is in court documents.
In the letter, Spencer explained that investing in the cloud and content is critical to realizing Microsoft’s gaming potential. Therefore, it is more profitable for corporations to bet on the development of Xbox Cloud Gaming, rather than on the number of consoles sold.
Note: during testimony before the court in the case against the US Federal Trade Commission (FTC), Xbox Vice President Sarah Bond said that Xbox Cloud Gaming is not popular and works at a loss.