The claims, which began circulating on Reddit and X (formerly Twitter) last week, suggested that the two retail giants would stop selling Xbox Series X|S hardware due to declining sales and a supposed shift toward digital distribution, but Microsoft has now confirmed that is not the case.

In a statement to Windows Central, the company said: “Target and Walmart, among other retailers, remain committed partners for Xbox consoles, accessories, and games.”

The report added that both retailers have reiterated their commitment to stocking Xbox products in stores and online.

Despite this clarification, the rumors highlight ongoing concerns about Xbox’s current market position.

Last month, Costco announced that it would stop selling the Xbox Series X|S consoles in the US and UK, citing a “business decision”.

The decision follows months of reports suggesting Xbox hardware sales have fallen behind Sony’s PlayStation 5 and Nintendo’s Switch, particularly outside the US.

As well as Costo, Sam’s Club deeply discounted its Xbox stock, leading many to believe the retailer was also planning to drop Microsoft’s gaming line entirely.

Adding to the pressure, Microsoft has also introduced significant price hikes across its subscription services.

The cost of Xbox Game Pass Ultimate has jumped by 50 per cent, now costing $29.99 per month in the U.S.

However, the company confirmed that current Game Pass members in markets such as Germany, Ireland, India and South Korea will maintain their current pricing “for now”, provided their auto-renewal remains active.

Even so, new subscribers - or those resubscribing after a cancellation - will be subject to the updated rates.