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chemgear · 10-23-2025, 04:15 PM

More studio closures, cancellations and price increases incoming for sure. They're going to have to scrape and cut to try to increase things versus their historical numbers.

https://www.bloomberg.com/news/artic...uverify%20wall

Microsoft Pushes Xbox Division to Hit Higher Profit Margins

Management’s goal of 30% profit margins for gaming has led to job losses, canceled projects

Microsoft Corp. is asking its Xbox gaming division to produce profit margins that are well above the industry average, ratcheting up pressure on its video-game makers during a difficult time for the field at large.

Over the past two years, executives at the Seattle-based software giant have set an across-the-board goal of 30% “accountability margins,”

The average profit margin in the video-game industry in recent years has ranged between 17% and 22%, according to estimates from S&P Global Market Intelligence, while coming in between 10% and 20% over the past six years at Xbox.

The change has hurt Xbox game sales, according to the people — a continuing challenge that may make it even more difficult for the studios to achieve a 30% profit margin. To account for the lost sales, Xbox offers its developers a credit, which it calls “member-weighted value” and is calculated based on several factors, such as the number of hours that Game Pass players collectively spend on a particular title. The opaque formula seems to favor games in which players can spend the most amount of hours, such as online multiplayer titles, according to people familiar with the calculations.

10-23-2025, 04:15 PM	#2335
chemgear Franchise Player Join Date: Feb 2010 Exp:	More studio closures, cancellations and price increases incoming for sure. They're going to have to scrape and cut to try to increase things versus their historical numbers. https://www.bloomberg.com/news/artic...uverify%20wall Microsoft Pushes Xbox Division to Hit Higher Profit Margins Management’s goal of 30% profit margins for gaming has led to job losses, canceled projects Microsoft Corp. is asking its Xbox gaming division to produce profit margins that are well above the industry average, ratcheting up pressure on its video-game makers during a difficult time for the field at large. Over the past two years, executives at the Seattle-based software giant have set an across-the-board goal of 30% “accountability margins,” The average profit margin in the video-game industry in recent years has ranged between 17% and 22%, according to estimates from S&P Global Market Intelligence, while coming in between 10% and 20% over the past six years at Xbox. The change has hurt Xbox game sales, according to the people — a continuing challenge that may make it even more difficult for the studios to achieve a 30% profit margin. To account for the lost sales, Xbox offers its developers a credit, which it calls “member-weighted value” and is calculated based on several factors, such as the number of hours that Game Pass players collectively spend on a particular title. The opaque formula seems to favor games in which players can spend the most amount of hours, such as online multiplayer titles, according to people familiar with the calculations.