By Swati Khandelwal & Pallavi Srivastava/CNBC-TV18

It seems to be troubled days for Microsoft's X-Box as it seems the company is now winding up operations in several cities. Trouble seems to be brewing over the performance of Microsoft's much-hyped X-Box, which was launched in India in September 2006.

According to sources, the company has withdrawn from several Tier-I cities due to lackluster sales. Microsoft Entertainment & Devices Division has also withdrawn the marketing budget for the current fiscal.

The console's last TV commercial, which featured Akshay Kumar and Yuvraj Singh was created in 2006, for the launch of the console business. The company has been facing dismal sales already due to sloppy customer support, high hardware failure, and pirated games. While Microsoft games cost upwards of Rs 2,500, it is easily available in the grey market for Rs 100.

The company has repeatedly refused to share its India sales numbers. When contacted, Microsoft India spokesperson said, "The Microsoft Entertainment Devices Division is very much on track with its targeted business plans."

Just a fortnight ago, Microsoft had decided to cut prices of its X-Box 360 Arcade System by 11-20% in four Asian markets- South Korea, Hong Kong, Taiwan, and Singapore. The company has not brought down the prices in India at all. Experts say this is mainly because Microsoft can't take any more losses on the console business in India.

In March this year, Microsoft's gaming division got its first jolt when Mohit Anand, Country Manager, Microsoft Entertainment & Devices Division put in his papers. According to sources, Ashim Mathur, Marketing Head, Entertainment & Devices Division, Microsoft India, is also slated to leave the company. But when contacted, he denied any such development, while Microsoft refused to comment.