Over the past couple of months, you may have come across this idea that Microsoft has placed a target of 30% profit margins on the Xbox division — and this stems from a report that first mentioned it back in October.
At the time, Bloomberg noted how these profit margins were "well above the industry average" of 17-22%, while Xbox had ranged between 10% and 20% over the past six years.
However, Microsoft has now directly responded to this claim in a response to CNBC, telling that outlet how despite setting ambitious goals, the 30% profit margin target is incorrect. Here's a look:
"Microsoft told CNBC that while the company does set ambitious goals, the reported 30% profit margin target was incorrect."
In that original report from Bloomberg, it was mentioned that "game makers at Xbox weren’t asked to hit specific numerical targets" in the past, but "the new target" was implemented by Microsoft CFO Amy Hood in late 2023.
There was also a suggestion that these high expectations from Microsoft had contributed to the cancelled projects, raised prices and loss of jobs that we've seen over the past couple of years at Xbox.
Nevertheless, Microsoft is saying that 30% target is hogwash, although we wouldn't be surprised if it's still relatively close to that figure. The company clearly expects big things from Xbox, and here's hoping it all works out in 2026!