A few hours ago, Windows Central reporter Jez Corden published an in-depth analysis article exploring the current complex situation of Xbox. Earlier this week, CEO Asha Sharma outlined the current state of Xbox, which is struggling to maintain a razor-thin 3% profit margin after costs.
Therefore, after lowering the price of Game Pass Ultimate and restarting the exclusive game plan, Sharma's next goal is to "reinvent" Xbox, which includes upcoming layoffs (rumored to be as high as a thousand people) and possibly even the closure of some studios. Double Fine and Compulsion Games are considered potential targets for layoffs.
How did Xbox end up in such trouble? Hardware sales have been in decline for a long time, with games like Oath, Midnight South, Hellblade 2, Forza Motorsport, and The Outer Worlds 2 performing well below Microsoft's expectations, while other projects, like the canceled Perfect Dark reboot, Rare's Everwild, and ZeniMax Online's Project Blackbird, ended up being outright investment failures.
In addition, the development time of games such as Undead Labs' "State of Decay 3" and Playground Games' "Fable 4" has also exceeded expectations. However, it seems that these two games are progressing smoothly and are planned to be released in 2027.
But Corden revealed that there is another root cause behind it, the ongoing memory shortage. According to reports, Xbox failed to obtain enough memory at a fixed price and may now lose "hundreds of dollars" on every Series S|X console sold.
"To make matters worse, Xbox is having difficulty obtaining sufficient quantities of fixed-price memory, which is critical to maintaining its hardware profit margins. I understand that Xbox is currently losing hundreds of dollars per Xbox Series X|S console sold, not tens of dollars. Asha Sharma pointed out that since the cost accounting of Xbox Series
The choices Xbox has made over the past five years mean that the component crisis will affect Xbox more than its competitors, and new partnerships and business models will be needed to continue producing console hardware. This coincides with previous rumors that the upcoming Project Helix console will also be manufactured by partners such as ASUS or MSI.