According to Satya Nadella, Xbox should now be consistently profitable, or in other words, able to sustain itself.

Over the past few days, Xbox and Microsoft executives have made numerous public statements. In an interview series, Xbox CEO Asha Sharma and Chief Strategy Officer Matthew Ball outlined a bold plan to rescue the division from its low profit margin and avoid a potential spin-off, joint venture, or sale by the parent company.

In a video interview with Hard Fork, Nadella stated that no one can accuse Microsoft of failing to invest in Xbox over the past 25 years. However, he added that now is the time to make Xbox sustainable and generate revenue from its content. Nadella even joked that YouTube currently monetizes Xbox games better than Microsoft does. His statement makes it clear that Microsoft will no longer treat Xbox with kid gloves. It must stand on its own two feet or perish because Microsoft will no longer finance it indefinitely. He added that Sharma and her fellow executives must develop a new model that unifies all the different Xbox platforms, including consoles, PCs, mobile devices, and the cloud.

“Asha is really 100 days in, and she posted that in the next 100 days, she will take a fresh look to ensure that we deliver what our fans expect from us, in terms of both hardware and publishing. The challenge for us now is to think about how to innovate in both hardware and games in an economically viable way going forward. We’ve invested a lot. No one can accuse Microsoft of not investing over the last 25 years. Now, we have to turn this into a sustainable business that delivers one of the best forms of entertainment. The challenge is that we haven’t been monetizing that entertainment. In fact, we’ve been subsidizing it. In fact, more Xbox games are monetized on YouTube than on Microsoft platforms.

Unfortunately, due to developments in the cloud and AI, prices have increased. This is happening with PCs and phones, and it’s impacting Xbox as well. The scarcity of semiconductor supply, particularly memory, is having a significant impact on consumer electronics. I think that’s a temporary issue that we’ll get through. It’s not going to be permanent. However, there is a permanent issue: What will the Xbox model be going forward? Obviously, PCs and consoles both have their place. Mobile has people playing elsewhere. So, we have to bring it all together while staying true to what we’ve always done,” Nadella said.

Though the path is already clear thanks to Project Helix, which allows users to run PC games on the console, this is no easy task. The software situation is perhaps more problematic. Sharma confirmed that, until the division’s situation improves, Xbox can afford one or two exclusive titles at most – currently, Gears of War: E-Day and Clockwork Revolution. Then there’s the issue of development. The new Xbox head wants to invest more in major franchises like Halo, Fallout, and The Elder Scrolls while cutting funding for smaller games.

It will take time for the new leadership’s measures to impact the bottom line. Until then, Xbox will have to persevere somehow.

Source: WCCFTech