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Microsoft Reportedly Ordered Its Xbox Division to Boost Profits to an Unrealistic Level
Microsoft demands a 30% profit margin from Xbox, leading to layoffs, project cancellations, and prioritization of cheaper or high-revenue projects, Bloomberg reports.
- Microsoft pushed its Xbox division to meet a 30% accountability margins target, well above the industry’s 17-22% average, Bloomberg reports.
- CFO Amy Hood implemented the 30% margin target in fall 2023 amid Microsoft’s $69 billion acquisition of Activision Blizzard, Bloomberg’s sources say.
- Several studios faced layoffs and canceled projects as Microsoft raised Xbox Game Pass Ultimate to $29.99 and increased console prices amid thousands of Xbox employees losing jobs.
- Developers shifted toward lower-cost, revenue-focused projects, as Xbox leadership prioritized cheaper or higher-revenue projects over riskier ones and released first-party games on competing platforms.
- Financial results and prior pricing moves suggest future returns to higher prices next year as Hood said Xbox operating income rose 34% this quarter after prioritizing higher-margin work, and $80 game prices were rolled back to $70 amid backlash.
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36 Articles
36 Articles
Microsoft Has Reportedly Pushed Xbox Studios to Deliver a 30% Profit Margin, Allegedly Leading to All Those Layoffs, Canceled Projects, Price Rises, and the End of Exclusives
A new report has shed light on the goings on at Microsoft, which has allegedly pushed Xbox studios to deliver a 30% profit margin — much higher than the industry average.
·United States
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Coverage Details
Total News Sources36
Leaning Left6Leaning Right0Center1Last UpdatedBias Distribution86% Left
Bias Distribution
- 86% of the sources lean Left
86% Left
L 86%
14%
Factuality
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