I don’t think it’s an exaggeration to say that this console generation has been rough for Xbox fans. We’ve had two price increases for the Series X|S consoles, multiple layoffs and studio closures, and a 50% price increase for Xbox Game Pass. Bloomberg’s Jason Schreier did a bit of digging into the state of Xbox, and it turns out Microsoft’s profit demands are partly to blame for a lot of the issues.
Multiple Xbox employees were interviewed in Bloomberg’s report, and it turns out that over the past two years, Microsoft set a 30% profit margin for the Xbox gaming division. According to S&P Global Market Intelligence, the average profit margin in the industry ranged between 17% and 22% from 2022 to 2025. Neil Barbour, S&P Global analyst, stated the following on the matter:
“A 30% or better margin is usually reserved for a publisher that is really nailing it.”
Xbox Fans Are Losing Confidence
This is a relatively new target for Xbox, set by Microsoft Chief Financial Officer Amy Hood back in 2023. Surprise, surprise — this target was set shortly after Microsoft’s $69 billion buyout of Activision Blizzard. Remember when Microsoft insisted Game Pass prices wouldn’t increase because of this acquisition? I do.
To achieve this ridiculous 30% target, Xbox had to cut costs and improve profits. That means no risky games, no redundant teams, canned projects, and studio closures. The Series X generation is nothing more than a stark reminder to gamers that these are just multi-billion-dollar companies that care about profits. And developers that actually create the games you love are at the mercy of these executive decisions.
Adding fuel to the fire, apparently the next-generation Xbox will reportedly be a “very premium, very high-end curated experience,” according to Xbox president Sarah Bond. They have to know that with statements like this, Xbox is leaving a lot of fans behind, right?
Instead of doubling down on experimental studios and long-term IP building, the division is starting to shrink its identity into something purely corporate. That’s a dangerous direction for a platform that’s already losing mindshare to PlayStation and Nintendo.
Still, it’s not all doom and gloom. October 2025 is a great month for Xbox owners, with Little Nightmares 3, Keeper, Ninja Gaiden 4, and Outer Worlds 2 reminding everyone there’s still life in the platform. The talent is there, it’s just being held back by unrealistic business expectations.
