Microsoft CFO Puts Xbox Under Strict Profitability Conditions — Bloomberg Investigation

A new Bloomberg investigation reports that Microsoft CFO Amy Hood set a 30% profit margin target for Xbox in 2023—almost double the industry average (around 17%). This strict financial benchmark, termed 'margin accountability,' has become a catalyst for massive layoffs, studio closures, and project cancellations in the company's gaming division.

According to FTC leaks, Xbox achieved only a 12% margin in the 2022 fiscal year, with the average for the previous six years ranging between 10% and 20%. SP Global analyst Neil Barbour called 30% 'a target usually set by publishers that achieve exceptional results.'

The repercussions were severe: more than 10,000 layoffs at Microsoft earlier in 2023, including 1,900 in the gaming division by January 2024. In May of the same year, the company closed the Arkane Austin, Tango Gameworks, Alpha Dog Games, and Roundhouse Games studios. In September, another 650 layoffs occurred, with an additional 9,000 dismissals in July 2025.

Canceled projects included the Perfect Dark reboot, Everwild from Rare, Project Blackbird from ZeniMax Online, and Contraband from Avalanche Studios.

Former Xbox executives also highlighted internal contradictions with Game Pass: subscriber growth often decreases direct sales profits, further deepening financial pressure. The price increase of Game Pass Ultimate in 2025 caused a wave of dissatisfaction and mass subscription cancellations.

This situation casts doubt on Xbox's long-term stability as a platform, especially if the company continues to aim for ultra-high financial figures without considering the specifics of the gaming industry.