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Microsoft Wants Xbox to Hit 30% Margins, Explaining Price Hikes and Layoffs
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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Microsoft wants Xbox to have a profit margin of about 30%, which would put it well above the rest of the industry.
Microsoft wants Xbox to hit 30% margins, explaining price hikes and layoffs
According to anonymous Bloomberg sources, Microsoft began demanding 30 percent profit margins across all divisions starting in 2023. This target far exceeds the video game industry's average. The aggressive demand forced the Xbox division to implement drastic policy changes in an attempt to meet it.Read Entire Article
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technewstube.comMicrosoft has allegedly tasked Xbox to deliver a 30% profit margin, and if true, it could explain the reason behind its price hikes and mass layoffs
Xbox's job cuts and price increases could be due to a push from Microsoft to achieve a 30% profit margin.
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Coverage Details
Total News Sources40
Leaning Left7Leaning Right0Center3Last UpdatedBias Distribution70% Left
Bias Distribution
- 70% of the sources lean Left
70% Left
L 70%
C 30%
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