The Xbox brand has been in rough shape for a long time now, but recent years have been especially rough for team green. Between studio closures, layoffs, and price hikes on hardware and Game Pass, it seems like Xbox is doing anything it can to survive. That may even mean ditching consoles for good, although it seemingly won't happen next-gen.
Thanks to a fresh report from Bloomberg's Jason Schreier, we may finally know the root cause for the decisions Xbox has made for the past two years, and it all comes down to hitting an ambitious 30% profit margin.
Schrierer's report claims that Microsoft executives have "set an across-the-board goal of 30% “accountability margins,” a term Microsoft uses in lieu of profit margins, according to people familiar with the business." For context, Schreier points out that most of the video game industry ranges between 17% and 22% profit margin expectations.
For Xbox, which has lagged behind PlayStation and Nintendo in both hardware and software sales for around a decade, this was an unachievable goal without major changes. We know from leaked court documents in 2023 (also via Bloomberg) that Xbox showed a 12% profit margin during the...
