I do pin blame on Phil Spencer and Matt Booty as pointed out but at the same time, I do think trying to push the blame entirely towards them, that the layoffs happened because apparently Microsoft Gaming is a failing business unit, also absolves Satya and Microsoft of some of the blame, it pushes away from the simple matter that this is pure corporate greed.
1. We have reputable newspapers reporting that the layoffs were to push money towards AI. We know Satya just earmarked like $80bn towards AI spending for 2025. Microsoft choosing to invest their money in what they think is a bigger money maker does not mean other divisions (again, Xbox wasn't the only one hit) are failing, it just means they want to make more money and faster, Lol.
2. Zenimax Online Studios and King were both hit awful, King despite being massively profitable had layoffs in the hundreds so that they could replace the workers with AI. Zenimax despite being one of the most profitable studios across XGS and Zenimax (excluding ABK) was hit massively. TESO even just charted in Xbox's May 2025 NPD somehow and has consistently been a strong seller on Steam for like 5+ years straight.
3. Rare was hit badly despite being a profitable studio (look it up, it's public information required by UK law), Sea of Thieves like TESO consistently sells well and they recently ported it to PlayStation 5.
4. Game Pass is confirmed profitable, in addition, according to NPD, Subscription Spending has notably increased every month since CoD was added into Game Pass, before then it was stagnate and in May it just had a huge boost. I'll say the caveat again that Subscription Spending includes all Console Subs but it doesn't take a genius to make an educated guess that Game Pass would be a significant contributor to that increase.
5. Microsoft Gaming was confirmed profitable even before they acquired ABK (Phil said in the low single digits, I assume he means billions because $1m would be ridiculous, Lol). ABK itself as a public company was profitable ranging from $1 to $3bn and their operating margin was in the ranges of 20-30%. Integration costs took away ABK's profit but that should be over now.
6. Microsoft literally JUST started their porting initiative which would result in a notable increase in their revenue, some titles have sold millions already, they've dominated the NPD software chart, Oblivion Remaster was a massive hit and already the 2nd best selling game of 2025. They're almost certain to report a record breaking Q4 and this won't include cost savings of the layoffs.
7. Microsoft has consistently reported Xbox revenue growth for the past multiple quarters, they've sometimes beaten projections recently and have been singled out multiple times as their profit margins having notable increases, the Microsoft Gaming division has been praised as being the reason for profits increasing in "More Personal Computing" too.
8. PC Game Pass has experienced large growth recently, Xbox Cloud Gaming has set new records last quarter.
Ain't really anywhere Microsoft Gaming isn't growing aside from the Hardware but even that plummeting isn't enough to hurt the overall division's growth. There are things where failures are seen such as Turn 10's Forza Motorsport clearly underperforming and The Initiative/Perfect Dark's complete development fuck up but the rest can't be contributed to failings (King/Zenimax/Rare) and the overall division is healthy and growing by a notable amount. There's a few failings on Phil and Matt's side, but there's also just the fact that a lot of it just comes down to pure greed from Microsoft.
Last edited by Ryuu96 - on 15 July 2025
