Over the summer, I said on my Xbox Two Podcast that I’d heard a rumor that Microsoft was forcing Xbox to deliver a 30% profit margin. However, unable to land enough concrete evidence — I’d hoped the insane figure had been hearsay. It must’ve been, right?
Apparently, it isn’t.
The cancellation of promising games like Perfect Dark, Contraband, and others, are a direct result of Xbox leads Phil Spencer, Sarah Bond, and Tim Stuart attempting to balance Microsoft corporate’s demands without tanking the entire business. The amount of strain this arbitrary goal has put on Xbox cannot be overstated, as staffers, customers, and even third-party developers feel the gradual toxification of the Xbox brand.
Over the summer, Microsoft attempted to raise the base price of its games to $80, a move that was met with significant public backlash. Instead, they decided to re-work the Xbox Game Pass tiers, targeting the most sticky and dedicated Xbox Game Pass Ultimate subscribers with an extortionate 50% price hike. Xbox Series X|S game consoles have also seen aggressive price increases, and even Xbox developmental kits have as well.
The inconsistent messaging and seemingly desperate price hikes has people questioning whether or not Microsoft is deliberately sabotaging Xbox, and it certainly seems that way. Microsoft has been forced to repeatedly come out and deny that it is looking to kill Xbox hardware, and deny that retails are cancelling orders.
With Activision-Blizzard, Microsoft’s gaming division surpassed Windows itself in the firm’s diversified business. With the AI boom fuelling Microsoft’s share price, CEO Satya Nadella is enjoying a near $100 million pay packet in stock incentives, which preclude gaming from the equation.
With analysts and speculators trying to figure out whether or not the “AI boom” is actually predicting a gigantic AI bust, you’d think Microsoft would want to ensure its diversified business model remains healthy to reduce exposure. Apparently not.
The sprint of short-term thinking and anti-customer ideology will not only fail to deliver its desired 30% profit margins, but it will serve only to crater the only viable consumer brand Microsoft has left.
When will the insane greed end?