This Is Why Xbox Is Bringing All of Its Games to PS5 Now

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Xbox has definitely become a major publisher on PlayStation, though perhaps not intentionally.

A recent Bloomberg article (available with a subscription) examines the business reasons behind Microsoft’s unexpected decision to release games on platforms other than Xbox. While the report doesn’t reveal any major surprises, it does offer a clearer understanding of this significant shift in strategy – one of the most notable changes in the gaming industry recently.

According to a new report by Jason Schrier, Microsoft began requiring Activision Blizzard, which it recently acquired, to achieve a 30% profit margin starting in late 2023. Essentially, Microsoft’s financial team set a goal for the division to earn 30% of its revenue as profit.

This, according to those in the know, is far above the industry average of between 17% and 22%.

Sony’s profits have increased noticeably since completing its purchase of Bungie, and they reported a profit margin of about 16% for the first quarter of 2025. This highlights the considerable pressure on Microsoft’s gaming division to perform well.

The company has reacted to challenges by shutting down some studios, laying off many employees, and halting certain projects. At the same time, they’ve begun releasing all their games on the PlayStation 5, and titles like Forza Horizon 5 have become very popular on that platform.

So, it’s pretty interesting – apparently, even though Indiana Jones and the Great Circle came out on Xbox and PC a few months ago, it actually sold the most copies on PlayStation. I was surprised to hear that!

Bloomberg also reports the company is now prioritizing games that are inexpensive to develop, or those highly likely to be profitable. This shift could explain why projects like Perfect Dark and Everwild were cancelled, as they were likely seen as more ambitious and potentially less certain investments.

To make matters worse, the Redmond firm’s emphasis on Game Pass is not helping its position.

Offering its own games as part of a subscription service is likely hurting sales of those games at their full price, according to industry analysts.

The company is now paying developers based on how many hours players spend in their games. This system unintentionally benefits games with endless replayability, like multiplayer titles, more than single-player experiences such as Senua’s Saga: Hellblade 2.

The reports don’t say if Microsoft will adjust its profit goals later on, but we think they might have to if things don’t improve.

And this, folks, is why industry consolidation is not a good thing.

Microsoft now essentially runs a massive company overseeing many game studios. We’re worried about the future of those studios if Microsoft can’t successfully integrate and manage them all.

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2025-10-24 08:07