{"id":11157,"date":"2025-10-23T14:28:21","date_gmt":"2025-10-23T14:28:21","guid":{"rendered":"https:\/\/nextlevelnews.co.uk\/blog\/2025\/10\/23\/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\/"},"modified":"2025-10-23T14:28:21","modified_gmt":"2025-10-23T14:28:21","slug":"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","status":"publish","type":"post","link":"https:\/\/nextlevelnews.co.uk\/blog\/2025\/10\/23\/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\/","title":{"rendered":"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"},"content":{"rendered":"
\n
<\/section>\n

A new report has shed light on the goings on at Microsoft, which has allegedly pushed Xbox studios to deliver a 30% profit margin \u2014 much higher than the industry average.<\/p>\n

Bloomberg\u2019s Jason Schreier reported<\/a> that Microsoft\u2019s 30% profit margin goal had led to the gaming division\u2019s huge layoffs, canceled projects, controversial price rises, and multiplatform push.<\/p>\n

The cuts to Xbox have been deep. Thousands of staff have lost their jobs over several rounds of layoffs. Games such as Rare\u2019s Everwild<\/a> and The Initiative\u2019s Perfect Dark reboot<\/a> were canceled after years of development. ZeniMax Online Studios game Project Blackbird was canned<\/a>, leading to mass layoffs. The Initiative was also shut down. Last year, Microsoft closed Redfall developer Arkane Austin and Hi-Fi rush developer Tango Gameworks.<\/p>\n

<\/section>\n

Meanwhile, Microsoft has increased the price of the Xbox Series X and S consoles, and the price of Xbox Game Pass Ultimate to $29.99 a month \u2014 the latter of which was a hugely controversial move<\/a>. Microsoft tried to make the jump to $80 video games, but ended up reverting to $70 after fans pushed back on the idea of paying $10 more for Obsidian\u2019s The Outer Worlds 2. Most expect Microsoft to go to $80 at some point next year.<\/p>\n

Bloomberg<\/a> said the average profit margin in the video game industry is 17-22%. Over the past six years, Xbox has hit 10-20%. To put that 30% target into more context, Sony’s PlayStation division achieved a 16% profit margin in Q1 FY25. Bloomberg said Microsoft Chief Financial Officer Amy Hood enforced the new target in fall 2023 \u2014 amid Microsoft\u2019s $69 billion acquisition of Call of Duty maker Activision Blizzard.<\/p>\n

The upshot now is, according to Bloomberg<\/a>, that games that are cheap to make or considered more likely to make lots of money may take priority over riskier projects. Xbox\u2019s \u201cfloundering\u201d hardware division, meanwhile, may face \u201ca significant rethinking.\u201d<\/p>\n

<\/section>\n

IGN has reported on recent comments from Xbox president Sarah Bond, who said the next-gen Xbox console will be \u201ca very premium, very high-end curated experience.\u201d<\/a> Bond has also called the idea of exclusive games \u201cantiquated.\u201d<\/a> Nowadays, Xbox Game Studios is one of the most prolific and successful publishers on PlayStation.
Microsoft issued Bloomberg a statement that suggested its Xbox profit margin target isn\u2019t the same across every project.<\/p>\n

\u201cWe look at the business as a whole, balancing creativity, innovation, and sustainability across a diverse portfolio of offerings. As with any creative business, sometimes that means making hard decisions and stopping work on things that are no longer working for a variety of reasons, and shifting resources toward the projects that are more aligned with our direction and priorities.\u201d<\/p>\n

<\/section>\n

Wesley is Director, News at IGN. Find him on Twitter at @wyp100. You can reach Wesley at wesley_yinpoole@ign.com or confidentially at wyp100@proton.me.<\/em><\/p>\n<\/section>","protected":false},"excerpt":{"rendered":"

A new report has shed light on the goings on at Microsoft, which has allegedly pushed Xbox studios to deliver a 30% profit margin \u2014 much higher than the industry average. Bloomberg\u2019s Jason Schreier reported that Microsoft\u2019s 30% profit margin goal had led to the gaming division\u2019s huge layoffs, canceled projects, controversial price rises, and […]<\/p>\n","protected":false},"author":1,"featured_media":11158,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"pagelayer_contact_templates":[],"_pagelayer_content":"","footnotes":""},"categories":[1],"tags":[],"class_list":["post-11157","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"yoast_head":"\nMicrosoft 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 - Next Level News<\/title>\n<meta name=\"description\" content=\"Stay on top of the gaming world with Next Level News. 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