Microsoft Rejects Rumors of a 30% Profit Margin Target for Xbox

Microsoft has issued an official response denying recent claims that it pushed its Xbox gaming division to reach a strict 30% profit margin. The statement aims to calm growing speculation about internal financial pressure following layoffs and project cancellations.

Microsoft responds to report claiming aggressive 30% Xbox profit goal

The controversy began with a report from Bloomberg, which suggested that Microsoft’s CFO advocated for a 30% profit margin goal for the Xbox business. According to the report, this alleged target exceeded normal expectations for the gaming industry and may have played a role in recent restructuring decisions. Several industry insiders later echoed similar claims, saying they heard about ambitious margin expectations tied to Xbox.

Microsoft directly addressed the report in a statement to CNBC. The company said the specific 30% margin figure was incorrect and emphasized that no such fixed target applied to the Xbox division. Microsoft acknowledged that it sets challenging performance goals across its businesses but clarified that the reported number did not reflect internal planning for Xbox.

The original Bloomberg narrative pointed out that most gaming companies operate with margins between 17% and 22%, making a 30% target unusually high for the sector. Microsoft did not reveal what profit benchmarks it uses internally for Xbox, leaving questions about its long-term financial strategy unanswered.

The clarification comes during a difficult period for Xbox. Console sales reportedly fell by nearly 70% following recent price increases, and Microsoft skipped its traditional Xbox Wrapped-style annual recap this year. Instead, the company appears focused on stabilizing the brand and investing in future projects.

More details may emerge as Microsoft continues to reshape its gaming strategy.

Via Insider Gaming