tech
"This cannot continue": Xbox leaders lay out "hard truths" behind sagging brand
Brutal self-assessment paints a picture of a Microsoft gaming division in crisis.
TL;DR
- Xbox is experiencing low profit margins (3%) and declining revenues, despite significant investments in acquisitions.
- The company admits to overextending itself with acquisitions like Activision and underfunding its own industry-defining franchises.
- A strategic "reset" is planned, focusing on a reliable pipeline of first- and third-party exclusives, a shift from a multi-platform strategy.
- Hardware challenges include rising component costs and supply chain issues, leading to consideration of new business models and partnerships for future hardware (Project Helix).
- Previous strategies, like cloud gaming and underpriced Game Pass subscriptions, are being re-evaluated as subscriber numbers decline after price increases.
- Layoffs are planned across the Xbox division, along with cuts to marketing and other budgets, as part of the reset.