Sarah Bond, president of Xbox, has addressed recent rumors claiming that Microsoft has set profit margin targets of 30% for its gaming division. This figure is notably higher than the industry average, which usually falls between 17% and 22%.
For context, an October report by journalist Jason Schreier suggested that since late 2023, the Xbox division has been under closer supervision by Microsoft’s chief financial officer, Amy Hood. According to the report, financial targets were raised significantly, aiming for 30% margins. This approach may have contributed to recent layoffs, the cancellation of projects considered less profitable — such as Perfect Dark — and, at least in part, to higher prices for consoles and Game Pass, all in an effort to increase profitability.
The Xbox President Neither Confirms Nor Denies
The topic came up during an interview with Fortune Magazine, which asked Bond a very direct question:
“Microsoft recently set ambitious profit margin targets of 30% for Xbox, well above the industry average. How does that influence its investment, its creative decision-making? Has anything changed in that regard?”
Bond’s response did not directly address the percentage, nor did she clearly deny the claim. Instead, she chose to broaden the discussion, focusing on a wider vision aimed at growing both players and developers within the Xbox ecosystem.
“We’re always just adjusting our investment based off of what’s happening in the macroeconomic industry, what players are asking and what developers are asking for, and we’re really focused on giving a full suite of experiences people across all of that. And you’re right. It’s a continuous cycle where we are making sure that we’re driving a profitable business, a healthy business, but we’re also driving more player growth and developer growth and engagement across the whole system.”
In short, the Xbox president sidestepped the question of profit margins in a careful and measured way. However, the lack of a clear denial — combined with the decision to shift the focus to broader business goals — may suggest that the leaked information is not entirely unfounded.
