Microsoft has debunked past claims that it has told its gaming division Xbox that it must target a 30% profit margin.
The debunking came as part of a new CNBC report that spoke with Microsoft about multiple issues and reports the company has seen over the past year.
CNBC acknowledges that a Bloomberg report said Microsoft has set its gaming division, Xbox, with the ambitious goal of achieving a 30% profit margin, which has led to layoffs and cancelled projects.
According to Bloomberg, the target was set by Microsoft’s Chief Financial Officer, Amy Hood, who said that the 30% target was “accountability margins” across the company, including Xbox. The report was subsequently backed up by other industry figures, who said that they had heard similar news of the ambitious targets.
The 30% target is much higher than the industry standard, which averages 17-22%.
In response to the rumor, Microsoft reportedly told CNBC that while the company does set ambitious goals, the reported 30% profit margin target was incorrect.
Xbox has had a tough year, with thousands of jobs impacted and several projects cancelled, including The Initiative’s Perfect Dark, Rare’s Everwild, and ZeniMax’s MMO under the codename Blackbird. Last week, it was announced that Xbox would not be having an ‘Xbox Wrapped’ this year due to budget constraints.
It’s currently unclear whether Bloomberg will redact or offer more insight into Microsoft’s ambitious goals, but should we get more information, we will update this article.
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Tom Henderson is Insider Gaming's Co-Founder and Editor-In-Chief. When he's not running one of the industry's leading independent video game websites, he's probably playing an FPS like Call of Duty,…
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Actions speak louder than words 🤷♂️
If it’s not 30%, why cut something like ‘Xbox Wrapped’ where the coding behind it can be reused with the new year range update. Would realistically take one programmer less than 15 minutes to patch code from 2024.
So MS did not fire thousands of people due to sky high profit expectations for the XBox Division, they fired them because the $7.5B ZeniMax purchase hasn’t immediately paid off, or maybe because in spite of their $80B investment in CoPilot it’s the least popular AI, or maybe it’s for some other reason. The important thing is the mega-rich guys with job security and golden parachutes didn’t fire them for that specific bad business decision.
Yeah I don’t think we should take them at their word
It was debunked…. 30% is way too low. Probably looking for 45-50% lol…. Execs need new cottages!!!
They need to buy Take 2 next also finally fire Aaron Greenberg, Phil Spencer, Sarah Bond, and Matt Booty.