"This cannot continue": Xbox leaders lay out "hard truths" behind sagging brand
Summary
Microsoft’s new Xbox leaders say the Xbox division is not doing well and needs a big reset. Despite spending a lot on acquisitions and hardware, Xbox profits are very low, revenues have dropped, and hardware sales are facing supply issues.Key Facts
- Xbox has a very low profit margin of about 3%, much lower than the industry average.
- Microsoft spent $69 billion to buy Activision, plus $20 billion on other gaming acquisitions and investments in the past five years.
- Xbox gaming revenues are down nearly $500 million compared to five years ago.
- The company admits it has not spent enough on popular exclusive game franchises.
- Xbox hardware sales have been falling for a while, and now Microsoft cannot make enough consoles to meet demand.
- Rising costs for computer parts like storage and RAM have hit Xbox harder than some competitors.
- Microsoft plans to change its hardware business model, possibly working with other companies to create Xbox-compatible devices.
- There has been a recent drop in Xbox Game Pass subscribers after a big price increase on the subscription service.
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