Xbox Cuts, Cancellations After 30% Margin Target

Microsoft CFO Amy Hood set an across-the-board 30% “accountability margins” target for Xbox in fall 2023 after the Activision Blizzard acquisition, far above the industry average (about 17–22%) and Xbox’s recent margins (roughly 10–20%). Reporting says pressure to hit that target has driven mass layoffs, studio closures and the cancellation of high-profile projects including Rare’s Everwild and The Initiative’s Perfect Dark. Executives have raised console and Game Pass prices and experimented with higher full‑price game tiers, while Game Pass profitability remains unclear and its credit/subscription system has weighed on traditional software sales. As a result, Microsoft is prioritizing cheaper or higher‑return projects, releasing more first‑party titles on rival platforms and reportedly rethinking the future of its hardware business. Sagging Series X/S sales and reliance on Activision profits have left Xbox reshaped by aggressive cost and revenue targets.