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Media: Microsoft is preparing massive layoffs at Xbox, cutting marketing budgets and may close one of the stud
Media: Microsoft is preparing massive layoffs at Xbox, cutting marketing budgets and may close one of the studios
According to sources from Bloomberg journalist Jason Schreier, Microsoft is preparing a new wave of cuts in the Xbox division, and it will be massive.The decision is planned to be announced shortly after June 30, when the report for the past financial year is ready.At the same time, Microsoft is going to significantly cut budgets for marketing and some other activities of the Xbox team.
Shortly after the Bloomberg story was published, Asha Sharma released an article about her first decisions as head of Xbox.She stated that Microsoft's gaming division is in bad shape and needs a complete reorganization.Reorganization also involves making unpopular decisions - this is the only way to start building something new.
Sharma revealed that over the past five years, Microsoft has spent more than $20 billion on developing the Xbox, creating content and subsidizing gaming hardware.And this is all without taking into account the purchase of Activision Blizzard for $70 billion.As a result, the company received not business growth, but stagnation.All investments ultimately led to a drop in revenue and a record reduction in margins.Therefore, drastic changes are required.
“We will end the fiscal year with an operating margin of 3%, which is below even last year's figures... Our annual revenue was down nearly $500 million.This cannot continue"
As the top manager added, under the leadership of Phil Spencer, the Xbox division has grown excessively.This was necessary as part of the strategy for promoting the subscription model, cloud gaming, and now multi-platform initiatives.But new assets were not given due attention - their potential, due to various circumstances, was never revealed.
“We have been entrusted with the management of franchises that have defined the development of the entire industry and still have enormous potential and high demand from players.But we did not provide them with sufficient resources so that they could fully compete and win.”
Xbox was negatively impacted by the move away from promoting the Xbox Series X|S consoles.At a certain point, Microsoft deliberately reduced the rate of production of its hardware in order to focus on the development of the cloud direction, and now, against the backdrop of the AI boom and the memory crisis, it found itself in a more difficult position than other platform holders, Sharma said.
In a message to employees, Sharma also indicated that exclusive games and new IPs will be very important to the continued success of Xbox.According to The Verge, the upcoming cuts at Xbox will be large-scale - the corporation may even close one of the game studios and cancel some upcoming games.
@gm_galactic #Xbox #game #Blizzard #Strategy
According to sources from Bloomberg journalist Jason Schreier, Microsoft is preparing a new wave of cuts in the Xbox division, and it will be massive.The decision is planned to be announced shortly after June 30, when the report for the past financial year is ready.At the same time, Microsoft is going to significantly cut budgets for marketing and some other activities of the Xbox team.
Shortly after the Bloomberg story was published, Asha Sharma released an article about her first decisions as head of Xbox.She stated that Microsoft's gaming division is in bad shape and needs a complete reorganization.Reorganization also involves making unpopular decisions - this is the only way to start building something new.
Sharma revealed that over the past five years, Microsoft has spent more than $20 billion on developing the Xbox, creating content and subsidizing gaming hardware.And this is all without taking into account the purchase of Activision Blizzard for $70 billion.As a result, the company received not business growth, but stagnation.All investments ultimately led to a drop in revenue and a record reduction in margins.Therefore, drastic changes are required.
“We will end the fiscal year with an operating margin of 3%, which is below even last year's figures... Our annual revenue was down nearly $500 million.This cannot continue"
As the top manager added, under the leadership of Phil Spencer, the Xbox division has grown excessively.This was necessary as part of the strategy for promoting the subscription model, cloud gaming, and now multi-platform initiatives.But new assets were not given due attention - their potential, due to various circumstances, was never revealed.
“We have been entrusted with the management of franchises that have defined the development of the entire industry and still have enormous potential and high demand from players.But we did not provide them with sufficient resources so that they could fully compete and win.”
Xbox was negatively impacted by the move away from promoting the Xbox Series X|S consoles.At a certain point, Microsoft deliberately reduced the rate of production of its hardware in order to focus on the development of the cloud direction, and now, against the backdrop of the AI boom and the memory crisis, it found itself in a more difficult position than other platform holders, Sharma said.
In a message to employees, Sharma also indicated that exclusive games and new IPs will be very important to the continued success of Xbox.According to The Verge, the upcoming cuts at Xbox will be large-scale - the corporation may even close one of the game studios and cancel some upcoming games.
@gm_galactic #Xbox #game #Blizzard #Strategy