Microsoft killed Xbox for Excel

Microsoft has implemented a profit margin target of 30% in its Xbox division, a figure higher than the average ...

Microsoft is aiming for a 30% profit margin for its Xbox unit, which is higher than the video game industry average, Bloomberg found.This guidance explains many of the controversial decisions Xbox has made in recent years, especially when it comes to project cancellations, mass layoffs, and price hikes.

The goal is still thousands of miles away.As Jason Schreier notes in his article, average profit margins in the video game industry have ranged from 17% to 22% in recent years, according to estimates from S&P Global Market Intelligence.As this reporter puts it, on Xbox, that number has been between 10% and 20% over the past six years.On the other hand, court documents from 2023 show that Microsoft's gaming business had a profit margin of 12% in the first nine months of fiscal 2022.

"Margins of 30 percent or higher are generally reserved for companies that really do it," said Neil Barbour, an analyst at S&P Global.For example, look at Capcom now, which is actually at its peak, with recent reports of operating margins approaching 40 percent.

Is it making a difference?According to Schreer, this goal was made in the fall of 2023 by Microsoft's financial director, whose team felt an important role in the game business in recent years.According to Bloomberg's source, Xbox developers initially had no intention of focusing on the best games without worrying about money.

Practical results.Xbox had to take drastic measures to achieve this margin.In 2024, it announced that it will release most of its games on Nintendo and Sony consoles for the first time.In July, we learned that it canceled several expensive projects that had been in development for more than seven years, such as Everwild, Perfect Dark or Project Blackbird.It also laid off thousands of employees and raised the prices of Game Pass and consoles.To increase, they also increased the price of their development kits.According to the report's sources, in the future, games that are cheaper to produce or with higher revenue expectations will be preferred over riskier bets.

The gaming crisis is over.Xbox Games' statement about the game on launch day directly affected game sales.And when the media shares those losses, Xbox offers its developers credit calculated based on a seemingly satisfying formula that players spend hours playing, such as online multiplayer, making it 30% harder to reach.

Another bet on hardware.Sarah Bond, Xbox's president, recently told Mashable that the company's next console will be an "amazing, highly advanced, refined console," indicating a change in strategy from previous generations and, as you might expect, a much higher price.There are already voices pointing to a more PC-like console, a concept similar to what we saw in the case of the ROG Xbox Ally.However, there is no official information yet so we have to wait to find out more details.

The official answer.The XOX Scoutpectson said that the company takes a "long view" that its business and success do not have the same shape "in every work or priority in every work or priority."He also said, in assessing the "overall business, excessive cutting of seeds, changes and stability of various city projects."As reported by Bloomberg, in July, Wom said in a phone call with employees of XOBom's Device Exvn is "high altitude follow."

APPEARANCE Xbox has been lost in the market to Playstation and Nintendo for years.Microsoft no longer cancels sales of Xbox, but analysts think that the PlayStation 5 is selling more than Microsoft, and everyone can understand that Microsoft will be more aware that Microsoft, and the conflict between executives and senior managers.No one knows what will end

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