Xbox Division Has Been Asked by Microsoft to Raise its Profit Margins – Rumour

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Microsoft has faced criticism for recent price increases for Xbox games and services. However, a new report from Bloomberg’s Jason Schreier suggests these changes are part of a broader strategy to boost profits within the Xbox division. Microsoft executives reportedly aim to increase their profit margins – internally called “accountability margins” – by 30 percent.

Recent pressures have caused Xbox to scale back its operations, including canceling projects, closing studios, and laying off thousands of employees. This comes as Xbox’s profit margins—between 10 and 20 percent over the last six years—have fallen below the industry average of 17 to 22 percent.

Microsoft CFO Amy Hood reportedly set a goal in Fall 2023 for Xbox content to achieve 30 percent growth. Previously, Xbox developers weren’t given specific targets, and were instead encouraged to simply focus on creating high-quality games. This new target has led to a shift in Microsoft’s release strategy, moving away from making games exclusive to Xbox consoles and instead releasing them on multiple platforms.

An Xbox representative clarified that the often-mentioned 30 percent goal isn’t a strict requirement for every game and project released under the Xbox brand.

We consider the entire business when making decisions, aiming for a good balance between new ideas, responsible practices, and a wide range of products and services. Like any creative company, we sometimes have to discontinue projects that aren’t succeeding and focus our efforts on those that best fit our goals and future direction.

Microsoft is now requiring its Xbox division to meet new financial goals because of recent acquisitions. The company’s purchases of ZeniMax in 2020 for $7.5 billion and Activision Blizzard in 2023 for $69 billion have led Microsoft executives to closely examine Xbox’s finances.

Microsoft will share full financial results later this month, but Amy Hood recently announced that Xbox operating income increased by 34% in the last quarter. This growth is due to the company focusing on more profitable areas within the Xbox business.

Honestly, as a gamer, I’m really curious about what Microsoft’s planning for the future, especially the next Xbox. We don’t know much yet, but Sarah Bond, the head of Xbox, recently hinted they might be thinking about releasing a more expensive, high-end console. It sounds like they’re aiming for a premium experience, which could mean a bigger price tag for us!

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2025-10-23 16:43