- Satya Nadella says Microsoft has invested heavily in Xbox, so it needs to become sustainable going forward.
- He admits the firm is not monetizing its gaming portfolio. Instead, it’s just been subsidizing it.
- Satya even jokes that there’s more monetization of Xbox titles happening on YouTube than at Microsoft.
Microsoft’s gaming brand is under heavy scrutiny after failing to perform well despite a heavy multiplatform push. The new Xbox leadership now aims to turn things around with a return to first-party exclusives and a player-first approach before it’s too late.
Satya Nadella now explains that Microsoft has invested heavily in Xbox over the last 25 years, yet it’s still not sustainable. The firm has failed to earn from the gaming entertainment it has cultivated, with even YouTube doing a better job at earning money from Xbox.
Why it matters: Xbox is certainly not lacking studio talent and meaningful gaming franchises, but Microsoft is not properly earning money from them. The tech giant has been forced into funding the brand to keep it alive instead.
Speaking to Hard Fork on YouTube, Microsoft CEO Satya Nadella says the executives are very thrilled about the progress Xbox has made over the decades. However, it needs to become a sustainable business to thrive in the future.
Satya implies that Microsoft is not willing to fund Xbox indefinitely if it does not stand on its feet. The tech giant previously bet on Activision to boost Xbox, but Black Ops 7’s poor performance fumbled those plans.
We’ve invested a lot […] for the last 25 years. Now we have to turn this into a sustainable business. […] The challenge we have is we’re not monetizing that entertainment. […] In fact, there’s more monetization of Xbox games happening on YouTube than Microsoft.
-Microsoft CEO, Satya Nadella.
He argues that Microsoft has been subsidizing Xbox instead of earning from it, joking that even YouTube makes more money from Xbox content than Microsoft itself. So the business strategy moving forward needs to change.
On a side note, a report suggested that Microsoft could spin Xbox off as a standalone company or turn it into a wholly owned subsidiary instead if things don’t improve. Joint ventures with investor partners are also being internally discussed.
Do you think Microsoft will manage to convert Xbox into a sustainable business? Let us know your thoughts in the comments below, or join the discussion on the Tech4Gamers forum.
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Shameer Sarfaraz has previously worked for eXputer as a Senior News Writer for several years. Now with Tech4Gamers, he loves to devoutly keep up with the latest gaming and entertainment industries. He has a Bachelor’s Degree in Computer Science and years of experience reporting on games. Besides his passion for breaking news stories, Shahmeer loves spending his leisure time farming away in Stardew Valley. VGC, IGN, GameSpot, Game Rant, TheGamer, GamingBolt, The Verge, NME, Metro, Dot Esports, GameByte, Kotaku Australia, PC Gamer, and more have cited his articles.
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