The Chief Executive Officer of Microsoft, Satya Nadra, admitted in the New York Times’ Hard Fork podcast that he had been giving blood to, rather than profiting from, Xbox for many years.
Nadra, referring to Xbox and the game business, said: “No one has been able to accuse Microsoft of not working for Xbox over the past 25 years. We must now turn it into a sustainable development business.” He noted that, although Xbox provided a rich recreational value, Microsoft had not been able to cash it and had in fact continued to replenish it. He added: “In fact, the Xbox liquidity on YouTube is higher than within Microsoft.”
In a previous internal memorandum, Asha Sharma, the new head of Xbox, stressed the need for the company to curb this large current expenditure and declining revenue. She had indicated that the profit margin for Xbox for the current fiscal year was about 3 per cent, according to the internal standards of the company. Xbox spent more than $20 billion over the past five years, while annual income continued to decline.
According to Bloomberg, Xbox plans to carry out a massive downsizing next month. In his podcast, Nadra spoke of two major pressures on the company. One is the temporary shortage of global semiconductors and memory, which leads to higher hardware costs, crushing the PC, mobile phones and other consumer-grade electronics markets; the other is the long-standing future direction of the Xbox business model.
According to the latest report of the Information, Microsoft does not exclude the possibility of a partial division or reorganization of Xbox into a fully-owned subsidiary. This will facilitate the easier future sale of Xbox or the establishment of joint ventures with external capital, although there are no immediate plans.
In the context of the Xbox game, it will accelerate the development of top-level IPs, including Photoring, Radiation and Axis. It was learned that the two games under the Besesta flag would be the focus of the Sharma.
In addition, Nadra and Microsoft Chief Finance Officer Amy Hood have approved a plan to increase input into the top game in the fiscal year to begin in July.
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