Microsoft doesn't want to sell xbox (hardware)
because they are after apple like margins
mediatek like margins are absolutely unacceptable for Microsoft
the result is in several markets there is no xbox hardware on the shelves despite demand being there
https://www.windowscentral.com/gami...n-or-steam-she-has-to-defeat-microsoft-itself
By Jez Corden published 3 hours ago
Microsoft's insane profitability aspirations have been Xbox's biggest enemy so far.
because they are after apple like margins
mediatek like margins are absolutely unacceptable for Microsoft
the result is in several markets there is no xbox hardware on the shelves despite demand being there
https://www.windowscentral.com/gami...n-or-steam-she-has-to-defeat-microsoft-itself
To save Xbox, Asha Sharma doesn't have to defeat PlayStation or Steam — she has to defeat Microsoft itself.
FeaturesBy Jez Corden published 3 hours ago
I've been covering Xbox for over a decade, and the same cycle keeps coming up time and time again: Microsoft itself is Xbox's biggest enemy. And to save Xbox, Asha Sharma will need to convince CEO Satya Nadella that subsidizing their recent sprint of poor decisions will take more than one or even two fiscal years.
Microsoft's insane profitability aspirations have been Xbox's biggest enemy so far.
Post Activision-Blizzard acquisition, for some odd reason, Microsoft came to Xbox with an insane and somewhat unprecedented aspiration: Xbox, the gaming company, would now chase a 30% profit margin target. A target that no other gaming platform in history has even come close to consistently.
Chasing this profit margin (known as an "accountability margin" internally) had an absolutely devastating impact on Xbox as an entity, with ramifications that will continue to play out long into the future.
Asha needs to defeat Microsoft itself
One of the things Microsoft sacrificed to chase these "aspirational" profitability metrics was Xbox hardware stock. Xbox Series X|S consoles are not sitting idle on store shelves. The demand is there. The stock isn't. Microsoft didn't purchase the units required to meet demand, quite clearly because the hardware itself doesn't translate directly into high margins.
And now, in the year of Grand Theft Auto 6, Microsoft will have no Xbox Series X|S stock to sell. The memory has already been purchased by PlayStation and other firms that think annually rather than quarterly. And as the AI route continues to destroy memory inventory, there's absolutely nothing the new Xbox leadership can do about it.
documents seen by Windows Central and verified by proven sources revealed a range of options Xbox considered to try and meet Microsoft's "30% by 2030" accountability margin targets. These included every absolutely dire option you can imagine. It included things like cost-saving by cutting backward compatibility with Xbox One and Xbox Series X|S generations with future hardware, and moving towards "evolving to be more software-based vs. hardware-based."
More short-term gains for long-term pain followed: putting games onto competing platforms, like PlayStation, helping Sony meet its own targets at the expense of Xbox's long-term viability as a platform.
The fact that Microsoft engineered Xbox to have as little hardware stock as possible helped justify this move away from exclusives. And the stock situation remains in play, which is why you should not expect Asha Sharma to have a great deal of breathing room on exclusive games.
At least in the near-term, Xbox has no stock to sell ... so why invest in exclusive games? Why invest in marketing Xbox hardware that doesn't exist to sell?
It's a self-perpetuating problem now, and at least in the medium term, selling games on PlayStation and other platforms will help Xbox invest in its future. But, it well and truly remains to be seen whether or not Xbox hardware will survive Microsoft's short-term auto-immolation on this front.
Asha Sharma has only known success so far: will Microsoft let her succeed?
Games take years to make — not quarters. Xbox needs a plan that spans years — not quarters. Fixing Xbox's image, desirability, and depleted trust will take years — and absolutely, not quarters.
Saving Xbox will require full subsidization to correct the mistakes that CFO Amy Hood and CEO Satya Nadella made, as well as vast new investments in its Xbox PC efforts, as well as on-going investments in an increasingly competitive gaming franchise space. And further investments in finding ways to appeal to younger cohorts, which Microsoft (and the industry at large, frankly) has utterly neglected.