Bloomberg reporter Jason Schreier has once again exposed the hidden handcuffs in the gaming industry—this time, the focus is on Microsoft. It seems fans of the next generation of Microsoft's gaming platform won't be having too much fun.
Schreier claims that Microsoft set an unrealistic goal for its Xbox division: Xbox should account for around 30% of the company's profits. Analysts estimate the average profit margin for this division is 17-22%, while Xbox only accounts for 10-20%. Furthermore, the new target, announced in 2023, explains the significant price increases for consoles, games, and Game Pass subscriptions.
Previously, the company's internal division developed games without strict external requirements, but that has changed. The company has canceled several ongoing projects and laid off employees—it now primarily approves the development of lower-cost games. However, analysts believe the 30% target remains elusive.
Game Pass isn't faring well either. Microsoft uses a different system to calculate value—the amount of time a player spends with a particular game. However, this metric has a significant drawback: a multiplayer game with long player retention is considered successful, while a strong single-player game lasting dozens of hours is not.
It's clear that the next-generation Xbox console will be an expensive entertainment option. Previously, the company's president of gaming, Sarah Bond, stated that they were preparing a "premium experience" for players, sparking public concern.
