Microsoft reportedly ordered its Xbox division to boost profits to an unrealistic level

The last 12 months have been pretty depressing for anyone invested in the long-term future of Xbox and the general health of the games industry. Back in May, Microsoft laid off 3 percent of its global workforce, with the company’s gaming division being one of the big casualties, and a number of upcoming titles were subsequently canceled. It painted a picture of a brand in crisis, but according to a new report, Microsoft has been setting its gaming division unrealistic profit targets for several years.

Sources told Bloomberg that in 2023, Microsoft implemented an "across-the-board goal" of 30 percent profit margins, which the report says Microsoft calls "accountability margins" internally. As Bloomberg’s Jason Schreier reports, this target, which was set by Microsoft’s Chief Financial Officer Amy Hood in fall 2023, is well above the recent industry average of 17-22 percent quoted by S&P Global Market Intelligence ...