Edited for clarification. Didn't mean LTD sales.

To add to the clarified statement, its holiday sales in general that are holding back the XBS's sales potential. The system has been doing fine on average for January through October, but clearly MS is unable to make enough units to meet holiday demand.

You know the Series S was discounted during the holidays, right ? And even with that they were still plenty in stock

Pretty clear they are speaking on behalf of the Series X when it comes to lack of supply.

Maybe not every prospective Xbox buyer is willing to buy the cheaper SKU simply because it's cheaper. They could very much be willing to wait for a Series X than settle for a less powerful, disc-less SKU, or for a PS5. I imagine there's a lot of people who want that premium Xbox SKU specifically but just can't get it.

If you look at how the XBS stacks up to its predecessor, you can see the non-holiday vs. holiday dynamic play out:

It's doing fine during the non-holiday months. For two years in a row, it outperformed the XBO during the Jan.-Oct. period, allowing it to mostly close the LTD gap. But something is happening during the holidays to hold it back. Does overall demand just spontaneously collapse during the holidays only to rebound afterward in the next year, or is demand simply not being met? I think it's likely the latter. In both 2021 and 2022, the holidays were a much smaller share of yearly Xbox sales than what had been the norm for a decade prior. I doubt that happens because of some temporary change in mass consumer psychology that resets two months later. Even with the lackluster holidays, the XBS was still up YoY every month in 2022 except June (which saw a massive restock in Series X units in 2021; it's when I bought mine in-store at GameStop), but its overall performance is being held back by the holidays, and that is almost certainly because of MS not being able to meet full demand, not just of the Series but of the Series X as well.

The PS5 has had similar problems. After slightly outpacing the PS4 in LTD sales in the U.S. during its first 12 months, it had an atrocious holiday period in 2021, with the worst non-launch November of any PlayStation system ever during the generation proper since the PS3's showing in Nov. 2008. That's especially bad considering how November's weekly averages have, with few exceptions, bested December's ever since 2011. Sony was obviously just not able to ramp up production to meet holiday demand levels. The PS5 was down YoY for the first half of 2022 before rebounding in the second half. So, Sony's supply issues persisted past the holidays and all the way through June 2022 period (except January, which was good due to big restocks which yielded the third-best January ever for a PS system in the U.S., after the PS2's showings in Jan. 2003 & 2005). But even though it sold more than twice as many units this past November as it did in Nov. 2021, it still fell short of the PS4's showing in Nov. 2015. While Sony is getting close to being able to fully meet demand now, there may still be some sporadic supply issues.

This generation's sales dynamics are impacted by supply more than any other before it. It's not like how the PS2 or 360 were supply-constrained for only their first few months. The issues have been persistent. We have yet to reach a point where the state of the market (for PS & Xbox, at least) is fully explicable in terms of demand.

Wow.

This is gonna be your 2020 covid bump all over again.

Come on man, a response like this to a post with significant effort put into it only discourages high quality discussion. The last thing this place needs is for users like him to decide to not bother putting a lot of effort into their posts anymore or stop posting all together. 

Yeeaahhh. We're not going to have this discussion, especially not after I've made clear that, in full accordance with site rules, nobody was to bring that episode up with me ever again.

I prepared a full long answer, but then decided to remove it, cause I know it won't change anything. I mean, MS explaining there were less demand for Q4, NPD and GameIndustry explaing there were less demand in January, with everybody agreeing on the fact that a lackluster year with no exclusives inevitably lead to sales going down, and Shadow being Shadow, saying "no that's definitly stock issue", I mean what do you want to answer to that. 

We're clearly not, you decided to make a new episode, but I'm not watching this time.

I dunno. But Redfall, Horizon and Starfield have heavy lifting to do.