Just 100 days ago, when new Microsoft Gaming CEO Asha Sharma replaced long-serving executive Phil Spencer, she said she'd work to "understand what makes [Xbox] work and protect it." Now, Sharma and Xbox Studios chief Matt Booty have laid out the many things that are not working for the Xbox brand in a brutal self-assessment the they say necessitates a wholesale "Xbox reset."
The message sent to Xbox employees and shared publicly via Xbox Wire last night paints a grim picture for practically every facet of the Xbox division. That portion of Microsoft is currently only seeing a "3% accountability margin" (read: profit margin), down year over year and well below both the game industry average and the lofty 30% margins that Microsoft is reportedly seeking across the board.
It's an underperformance, they write, born out of being "over extended" by moves like the $69 billion acquisition of Activision. That mega-merger came on top of $20 billion in spending on other acquisitions, platform investments, and hardware subsidies over the last five years, the executives write. But despite the spending spree, Microsoft's overall gaming revenues are down nearly $500 million compared to five years ago.
