Microsoft Quells Xbox Death Rumors Amid Retail Confusion, Assures Fans It’s Not Exiting the Console Business

Microsoft has moved to put to rest mounting speculation that it is pulling out of the console hardware business, confirming that the Xbox line remains very much alive.

The clarification followed a storm of reports over the weekend suggesting that major U.S. retailers, including Walmart and Target, were removing Xbox products from their stores — fueling fears that the company was quietly winding down its gaming console division.

The controversy began when posts surfaced on Reddit claiming that Target had started taking down its Xbox sections, with some users alleging that Walmart had not restocked the consoles in weeks. Soon after, a wave of social media chatter and online publications amplified the story, with some declaring that Microsoft was phasing out its Xbox Series X and S consoles altogether. The claims appeared plausible given a string of recent developments that had left gamers anxious about the brand’s future.

For months, Microsoft has faced accusations of deprioritizing its console business in favor of a “play anywhere” model focused on cloud streaming and cross-platform gaming. The company’s push into cloud-based gaming, powered by its Xbox Cloud Gaming service, allows users to play without owning a console — a model seen by many as the future of gaming. Microsoft’s support for handheld devices like the ASUS ROG Ally and the upcoming ROG Ally X only added to the perception that the company was shifting away from traditional living-room consoles toward portable and multi-device gaming.

The situation was compounded by deeper challenges facing Microsoft’s gaming division. Earlier this year, the company increased the price of its Xbox Series consoles twice — a move that dented sales and made the devices less attractive compared to Sony’s PlayStation 5. Several game studios under Microsoft’s ownership were also shut down amid cost-cutting and restructuring efforts, while the price of Xbox Game Pass, its flagship subscription service, rose by 50% for the top-tier plan. All of these developments fueled the belief that Microsoft was repositioning itself away from hardware and into software and services.

By the time the retail rumors emerged, many fans were ready to believe them. Reports circulated widely that Costco, too, had removed Xbox consoles from its inventory. The speculation snowballed, with headlines across gaming blogs declaring that Microsoft might be preparing to sunset its console business altogether.

However, evidence soon emerged to contradict those claims. YouTuber and gaming journalist Destin Legarie contacted several Target and Walmart locations to verify the reports. Employees from both chains reportedly confirmed that there were no internal memos or instructions to remove Xbox stock or clear inventory. One Target employee noted that while the store hadn’t received new shipments in about a week, more consoles were expected to arrive soon — albeit in small quantities.

Adding weight to the denials, Larry Hryb — better known as “Major Nelson,” a longtime public face of the Xbox brand who served 23 years as Director of Programming for Xbox Live — weighed in on social media. Hryb said he had personally visited several Target and GameStop outlets and found Xbox hardware and accessories still being sold. His comments helped steady fans’ nerves as confusion rippled through the gaming community.

Windows Central later conducted its own checks and confirmed that Xbox consoles were still listed and available at Target, although stock levels were low and availability appeared inconsistent. A Target employee told the outlet that the Xbox section was not being removed but acknowledged that console stock often fluctuates, particularly during transitional production periods or before restocks.

Microsoft itself then issued a statement to Windows Central, affirming that “Target and Walmart, among other retailers, remain committed partners for Xbox consoles, accessories, and games.” While the company stopped short of explicitly naming the Xbox Series X and S in its statement, the inclusion of the word “consoles” indicated that the hardware business remains part of its ongoing strategy.

Still, Microsoft’s vague wording left some observers parsing its every phrase. Some analysts suggested that the term “consoles” could refer not only to current-generation devices but also to the company’s expanding hardware ecosystem — including upcoming models and handhelds. That ambiguity reflects how Microsoft has subtly shifted its vision of what “Xbox” means in the modern gaming landscape.

Indeed, Microsoft is already planning future iterations of its hardware lineup. Reports suggest that the company is preparing a refreshed version of the Xbox Series X with a more compact design and possibly an all-digital variant. Executives are also said to be working on next-generation hardware slated for release around 2026, potentially featuring AI-driven optimization and hybrid streaming capabilities.

For now, Microsoft appears eager to reassure gamers that it is not abandoning the platform that helped define its gaming legacy. Despite sluggish sales and temporary retail confusion, Xbox consoles remain in production and on shelves — even if not in abundance.