2025 has been a tumultuous year for the Xbox brand, with massive layoffs, multiple price hikes for both its console portfolio and Game Pass subscriptions, and continued controversy over Microsoft’s work with Israel casting a shadow over the company’s gaming wing. A new report from Jason Schreier at Bloomberg has shed some light on what’s going on behind the scenes at Xbox, and a lofty profit goal looks to be the catalyst for these decisions.
According to the report, for the past two years, top executives have set an “across-the-board [profit margin] goal of 30 percent.” The report says that the new target was set by Amy Hood, Microsoft’s chief financial officer, whose team has “taken a larger role in the gaming business in recent years.”
For context, as Schreier reports, estimates from S&P Global Market Intelligence mark the average profit margin for the entire video game industry at between 17 percent to 22 percent since 2018, with Xbox specifically coming in between 10 and 20 percent.
