This retail shift follows Costco's previous decision to cease selling Xbox consoles, and industry analysts suggest the reduced shelf space reflects declining demand for physical Xbox games and consoles amid overall decreases in physical game sales.

The timing of these retail changes coincides with recent price hikes for Xbox products, including the Xbox Series X rising to about $650 and a 50% increase in Xbox Game Pass Ultimate subscriptions, which has led to consumer dissatisfaction and social media backlash.

Microsoft has emphasized that the removal of physical Xbox media is not a strategic shift away from physical games, affirming ongoing support and stating that the changes are part of normal retail remodeling.

The challenges faced by Xbox are further underscored by the cancellation of major exclusive projects like Project Ranger, due to creative disagreements, reflecting ongoing struggles in content development.

Major retailers Target and Walmart are reducing Xbox stock in their stores, with Target specifically removing the Xbox Series X from both in-store and online shelves, while Walmart's situation remains less clear.

In Target stores like those in Kansas City, Xbox items are limited, with a noticeable shift toward PlayStation and Nintendo Switch products, which are more widely available.

Microsoft has denied any plans to cancel new Xbox console projects, asserting that additional systems are still in development, though it remains uncertain whether these will resemble the Xbox Series X or other hardware.

Xbox hardware sales have been trailing behind PlayStation, and industry skepticism suggests Xbox might be losing market share, despite Microsoft's insistence on remaining committed to its gaming ecosystem.

While Xbox sales had already slowed, the reduced retail presence may benefit competitors like PlayStation and Nintendo, especially as Sony has also increased PS5 prices, decreasing consumer motivation to buy Xbox consoles.

The ongoing retail struggles for Xbox, marked by price hikes and platform issues, highlight a difficult year for the brand amidst declining market prominence.

The trend suggests Microsoft’s hardware may be losing retail prominence in favor of competitors, raising questions about Xbox’s future market share in the U.S.

While Walmart appears less affected and still carries some Xbox products, the overall situation indicates a shifting retail landscape for Xbox.

Microsoft also highlights its focus on cloud gaming, PC streaming, and expanding the Xbox ecosystem beyond consoles, maintaining that physical media support remains a priority.

These setbacks are part of a broader decline for Xbox, once a major industry player, now facing significant challenges in maintaining its market position.