Nadella Orders Xbox to Monetize 25 Years of Investment as Microsoft Ends Open-Ended Subsidies
Updated
Updated · Wccftech · Jun 13
Nadella Orders Xbox to Monetize 25 Years of Investment as Microsoft Ends Open-Ended Subsidies
3 articles · Updated · Wccftech · Jun 13
Summary
Satya Nadella said Xbox must now stand as a sustainable business, arguing Microsoft has spent 25 years building the gaming unit and can no longer keep subsidizing it indefinitely.
In a Hard Fork interview, he said Xbox games are monetized better on YouTube than inside Microsoft, underscoring the weak returns behind the push for a new business model.
Nadella tasked new Xbox chief Asha Sharma—100 days into the job—with defining a model that links console, PC, mobile and cloud, while higher chip and memory costs also pressure hardware economics.
Sharma has already signaled tighter spending: Xbox can currently support only 1 or 2 exclusives, with focus shifting toward major franchises such as Halo, Fallout and Elder Scrolls.
The tougher stance follows reports that Microsoft has explored options including a spinoff, joint venture or sale of Xbox as it tries to fix low margins and weak console sales.