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The story
In July 2026, Microsoft revealed in its official blog post “Resetting Xbox” that some of its gaming investments are losing 64 cents for every dollar spent, and that its profit margins remain at just one-third to one-tenth of those of its competitors. Even after launching its ninth-generation console, the installed base has kept shrinking, and while the company pinned its hopes on Game Pass and a multiplatform strategy, growth has fallen short of expectations. Following this announcement, users on 5ch’s Hardware/Industry (“Geha”) board debated the causes behind sluggish console sales, whether Game Pass is actually profitable, and whether Xbox should bring back exclusive titles.
“We’ve also learned that we aren’t the best home for every type of studio. Typically, for every dollar Xbox invests, we lose 64 cents.”
“Right now, our business isn’t healthy. Our profit margins are only about a third to a tenth of what comparable platform and publishing businesses see.
With the launch of our ninth-generation console, our installed base shrank while our cost structure grew. In pursuit of growth, we bet on Game Pass, multiplatform releases, and a broader content portfolio.
Source: news.xbox.com / Original article here
What people said
What if it could run Windows, Steam, and eroge (adult games)?
Just slap an Xbox sticker on a PC.
The faithful actually believed Game Pass was profitable!
It probably kept going because it was actually profitable — the margin was reportedly around 10%.
Why not just buy a regular gaming PC?
An affordable, gaming-focused all-in-one lets regular people buy with confidence.
Gaming PCs have too high a barrier to entry for the average person.
That's still a lower barrier than an Xbox selling in the double digits weekly.
Normal people wouldn't want to buy something as off-putting as an Xbox.
Because they kept pouring in Gates's bottomless money.
So they're going to shrink their profits even further?
and the whole mess started because they tried to buy CoD, a blunder that'll go down in gaming history.
Wait, seriously? Before they started releasing on PS in 2024, Xbox Series was actually winning? lol
Unlike Phil, though, they're actually spilling all the dirty laundry on the 'trash can' (slang for the boxy Xbox Series console).
the 'NO DISC, NO BUY' crowd
would defect from PS.
Seriously, that's the only path to victory left.
Just 'continuing' isn't enough.
Xbox's packaged-game market is already wiped out, so they'd need to say they're doubling down on reviving it to win over the physical-media crowd.
As it stands, third parties tend to skip discs for download-only releases, retailers won't stock them, and even Microsoft's own titles ship as 'key discs' with no actual game data on them.
That's not going to convince the people shouting 'no disc, no buy.'
Did Xbox even have any exclusives to begin with?
Even Forza Horizon 6 is on Steam.
Microsoft as a whole makes something like 20 times Sony's profit, so they're not pulling out
They'll try everything to turn things around
bringing back software exclusives will be one of those moves
That 'exclusive' thing?
They were already doing that with the Xbox Series, lol.
Then they should've just kept the console and services at launch prices instead of raising them. By that logic, since the group as a whole is profitable, it should've been fine.
That'll just shrink things even more lol
What they're boosting is strictly the profit 'margin,' so of course actual revenue keeps tanking.
It's obvious that mass layoffs plus cutting the product lineup will improve the 'margin' in the short term.
All they care about is pushing through restructuring while they're still in charge, consequences be damned — classic doublespeak from a corporate axe-man.
Then just stop releasing on PC.
That way, people would have no choice but to buy the hardware to play.
If they stop releasing on PC, that kills the whole 'Play Anywhere' feature.
Though honestly, nobody uses the MS Store anyway, so it's basically already dead.
Seriously, who even uses that feature?
If you already have a PC you don't need the trash can (Xbox console), so 'you can play on both Xbox and PC!' just gets a 'I'll just play on PC then' in response.
I don't think it was meant for people using both PC and Xbox — it was probably meant to eventually migrate Xbox users over to PC.
Except on that PC, Steam is steamrolling them one-sidedly and basically nobody buys PC games on the MS Store.
'Play Anywhere' has to be one of the top 3 terms you see constantly on Geha (the console-war board) but never anywhere else.
Quick Resume is another candidate.
Because cloud gaming going paid has prepaid Game Pass subscribers losing their minds over the new paywall
That, plus leftover frustration from the Nintendo Direct.
Obviously because the State of Play was garbage 😣
Background and Key Points of the Discussion
This admission comes from “Resetting Xbox,” a document Microsoft itself posted on its official site in July 2026, in which the company’s own leadership acknowledged the struggles of its hardware business. In the thread, opinions split between those who blamed the low profit margins on going multiplatform and raising Game Pass prices, and those who argued that Microsoft as a whole remains hugely profitable and has no reason to worry about pulling out. Some also pointed out that ‘profit margin’ can be improved simply through layoffs or a shrunken game lineup, sparking discussion about the danger of judging a business’s health by margin alone. While some users called for a return to exclusive titles, others noted that Xbox never really had many exclusives to begin with, leaving many skeptical that any turnaround plan would actually work.
*This article is compiled and summarized from the 5ch (Hardware/Industry, “Geha”) thread “Asha: ‘Xbox makes only a tenth of the profit of its rivals, has a smaller install base, and Game Pass grew less than expected’.”
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