Microsoft Debunks That It Sets a 30% Profit Margin Goal for Xbox Games

Microsoft has debunked past claims that it has told its gaming division Xbox that it must target a 30% profit margin.

The debunking came as part of a new CNBC report that spoke with Microsoft about multiple issues and reportsthe company has seen over the past year.

CNBC acknowledges that a Bloomberg report said Microsoft has set its gaming division, Xbox, with the ambitious goal of achieving a 30% profit margin, which has led to layoffs and cancelled projects.

According to Bloomberg, the target was set by Microsoft’s Chief Financial Officer, Amy Hood, who said that the 30% target was “accountability margins” across the company, including Xbox. The report was subsequently backed up by other industry figures, who said that they had heard similar news of the ambitious targets.

The 30% target is much higher than the industry standard, which averages 17-22%.

In response to the rumour, Microsoft reportedly told CNBC that while the company does set ambitious goals, the reported 30% profit margin target was incorrect.

Xbox has had a tough year, with thousands of jobs impacted and several projects cancelled, including The Initiative’s Perfect Dark, Rare’s Everwild, and ZeniMax’s MMO under the codename Blackbird. Last week, it was announced that Xbox would not be having an ‘Xbox Wrapped’ this year due to budget constraints.

It’s currently unclear whether Bloomberg will redact or offer more insight into Microsoft’s ambitious goals, but should we get more information, we will update this article.

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