Microsoft to Push Xbox More

Microsoft to Push Xbox More

Business

23 October 2025 13:28

Microsoft is reportedly demanding higher profitability from its Xbox division, setting a goal that far exceeds industry norms. According to a Bloomberg report from Jason Schreier and Dina Bass, Chief Financial Officer Amy Hood has instructed the company’s gaming arm to reach a 30% “accountability margin.”

This target represents a major leap from both Xbox’s past performance and the broader video game industry. S&P Global Market Intelligence data shows that gaming companies typically operate with profit margins between 17% and 22%. Microsoft’s own gaming division posted just 12% in 2023, falling well below those averages.

To achieve the new benchmark, Microsoft has taken aggressive steps. Over the past two years, the company has increased console and subscription service prices, canceled multiple long-running projects, and cut thousands of jobs across its gaming teams.

Two major titles have already been affected by the new directive. The reboot of Perfect Dark, developed by The Initiative, was canceled in July 2025 after roughly seven years of production. The studio behind it was subsequently shut down. Rare’s Everwild met a similar fate around the same time, ending another long development cycle.

An internal memo from Xbox CEO Phil Spencer, explained that these cancellations were linked to a corporate shift in priorities, citing a “focus on strategic growth areas.”

The restructuring underscores Microsoft’s ongoing efforts to make Xbox a more profitable arm of its business. However, the ambitious 30% profit target has raised questions within the industry about whether such margins are sustainable in a sector already grappling with high development costs and widespread layoffs.

More:Envy Reveals New Facilities

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Microsoft to Push Xbox More

Business

23 October 2025 13:28

Tags: Microsoft

Microsoft is reportedly demanding higher profitability from its Xbox division, setting a goal that far exceeds industry norms. According to a Bloomberg report from Jason Schreier and Dina Bass, Chief Financial Officer Amy Hood has instructed the company’s gaming arm to reach a 30% “accountability margin.”

This target represents a major leap from both Xbox’s past performance and the broader video game industry. S&P Global Market Intelligence data shows that gaming companies typically operate with profit margins between 17% and 22%. Microsoft’s own gaming division posted just 12% in 2023, falling well below those averages.

To achieve the new benchmark, Microsoft has taken aggressive steps. Over the past two years, the company has increased console and subscription service prices, canceled multiple long-running projects, and cut thousands of jobs across its gaming teams.

Two major titles have already been affected by the new directive. The reboot of Perfect Dark, developed by The Initiative, was canceled in July 2025 after roughly seven years of production. The studio behind it was subsequently shut down. Rare’s Everwild met a similar fate around the same time, ending another long development cycle.

An internal memo from Xbox CEO Phil Spencer, explained that these cancellations were linked to a corporate shift in priorities, citing a “focus on strategic growth areas.”

The restructuring underscores Microsoft’s ongoing efforts to make Xbox a more profitable arm of its business. However, the ambitious 30% profit target has raised questions within the industry about whether such margins are sustainable in a sector already grappling with high development costs and widespread layoffs.

More:Envy Reveals New Facilities

Share:

Sources:

Report mistake Submit news

Related news

View All

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