The admission comes as the software giant is widely expected to miss its target of 2.75 to three million consoles shipped in the 90 days since launch on 22 November.
Analysts estimate that 1.3 million consoles were shipped by the end of last year but warned that sales since the new year have been limited by shortages.
Microsoft announced at the Consumer Electronics Show in Las Vegas that 4.5 to 5.5 million units would be shipped by 1 July this year.
Microsoft also admitted to production glitches. "This is a complex piece of hardware with 1,700 different parts," said a spokesman.
"Every now and again the line will slow down because something has happened and there will be a component that did not make it that morning."
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