Zippy6 14 hours ago
A new article from Bloomberg has revealed some information regarding the financial situation at Xbox. The profit margin of the business has "plummeted to 3%" despite them investing over $20 Billion in (excluding activision) content, platform and subsidising hardware. They are apparently planning major layoffs next month as Asha tries to reset the business which they have publicly described as "unhealthy".
The full article is here (paywalled), I will put notable quotes below:
- Microsoft Corp.'s Xbox division is planning major layoffs next month, according to people familiar with the company's strategy. The layoffs, the exact scale of which is not yet clear, are expected shortly after the close of Microsoft's fiscal year on June 30. Xbox is also planning to significantly slash budgets for marketing and some other areas of the business
- In an email to employees on Wednesday seen by Bloomberg, Sharma wrote that the business had plummeted to a 3% "accountability margin," the metric Microsoft uses to reflect profit margin.
- "Excluding Activision Blizzard King, over the past five years, we have spent over $20 billion on ongoing investments in our content, platform and hardware subsidy, but our annual revenue has declined nearly half a billion during that time," she wrote. "Going forward, this cannot continue."
- "We are the fortunate stewards of industry-defining franchises that have enormous potential and player demand, but we have not adequately funded them to compete and win. At the same time, as we saw this past weekend at Showcase, a reliable pipeline of first- and third-party exclusives and new IP are critical to our success."
The email from Asha to Xbox employees has now been released Publicly: Next 100 Days: XBOX Reset - XBOX Wire
Last edited by Zippy6 - 14 hours ago
