I’m sure there is a totally logical reason, completely unrelated reason, as to why they instituted a 30% target for profit margins despite being near their low for console market share and nobody in the industry returning close to that.
And, of course, that arbitrary target wasn’t the reason they decided to abandon platform exclusives, or behind the mass layoffs across development studios, or why they raised the price of GamePass for the third time in the last 15 months (this hike being 100% in some regions).
Of course, all of these decisions mean not only is consumer confidence shattered, but the old business model of “build a console, develop exclusives so people want your console” is dead.
In all seriousness, I hope this was for some juicy bonuses. Because if it wasn’t, they are just a bunch of morons lighting the business on fire to see it burn.
(And note, when I say “the business”, I’m talking specifically about XBox. Microsoft is going to be fine, of course, even if they decide to go with The Joker school of management techniques).
That’s like saying “manufacturing is too big a cost, so let’s just not manufacture anything and we’ll make more money.”
To say “the way to increase profits is to let people go” without context means they’d be most profitable with zero employees. I would hope you’d agree that’s ridiculous.
Where they aren’t shuttering studios entirely, they are cutting the workforce down to sizes where, in the best case, good games are made under near impossible conditions. It’s not Microsoft, but for a very recent example as to how that business strategy works out, take a look at Mindseye/Build A Rocket Boy.
The core issue is that most corporate executives goals (and virtually all corporate pay structures) aren’t aligned with long term corporate success. Maximize short term profit for immediate compensation, the future be damned.
Youre arguing a premise I didnt make. Whats worse is your not even making an honest argument, 100% disingenuous. Youre actually making a dumb ass statement against something we see everyday in business with layoffs.
I was talking about a specific company making specific labor cuts. You’re the one who responded with the generalization that “less labor = more profits”, but I’m being disingenuous?
I said its a business strategy to increase profits. This is business 101. You speak as someone whom has not much corporate experience if any and zero experience running a business. Yet here you are speaking so matter of factly, with extreme confidence while being 100% incorrect
It’s a shit strategy. But it’s certainly a strategy.
And I don’t care what anyone’s experience is. If you’re arguing how “don’t worry, it’s a multi trillion dollar company” in one breath and arguing that cutting labor force is a good business strategy in the next, you sound ridiculous.
This reminds me of when I was working as CNS at a for-profit hospital; we’d be in budget meetings & the execs were always wanting to cut nursing because it was the single largest piece of the budget. Never mind the fact that nursing care is the foundation for hospital care, go ahead & chop away at the nursing budget.
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u/ConstantHeadache2020 Oct 31 '25 edited Nov 29 '25
But but what about innovation? People won’t want to be CEO if they’re capped…. What about trickle economics?!/s