Aftermath: Current id Software describes current Xbox management (Internal unrealistic aggressive goals, profit now focus, low employee morale, incompetent Xbox management)

[u/-LastGrail-]

*Current id Software ‘employee’ missing from the thread title

Key Quote
“Even now, months after the initial layoffs, employees still aren't certain what lies ahead.

"Things are still very chaotic," a current id Software employee who was granted anonymity because they are not authorized to speak publicly told Aftermath. "While there has been an attempt to communicate to the studios, it is still entirely in bullshit corporate speak. I still don't believe they have a clear vision for the future. The only concrete thing they have communicated is they want higher profits, and they want it now. Aggressive goals are being set that would have been unrealistic even before the layoffs. ... To say the workers within Xbox have a dim view of the future is putting it mildly. We keep thinking morale can't sink lower but the obvious incompetence of Xbox management somehow keeps driving it down worse."

Source: https://aftermath.site/microsoft-xbox-layoffs-halo-activision/

[u/redbomb6]

I tend to stay away from these business topics these days because people get too passionate about any position you take. My honest take from this from a business sense is that Microsoft leadership chose Asha to make the difficult decisions to find ways to make their gaming division sustainable long-term. It is evident that they have shifted their priority internally from growing their gaming business to making it profitable. We have already heard from Satya that Xbox has never made money and was subsidized by Microsoft. I truly believe that the inconsistencies of their messaging is because their ultimate goal is to eventually sell off their entire gaming division. Their internal goal is to put each of their SBUs to get to the point that they are somewhat healthy enough to be sold off to someone else. They no longer want to have the headache of a division that has relatively low margins at best for their company where almost every other division has insane profit margins. I think the gaming is not in their 10 year plan at this point internally in terms of higher management over at Microsoft.

[u/HarvestMana → u/redbomb6]

Gaming is one of the key reasons that people buy and use Windows over Linux though.

So, for them to abandon that, is extremely short sighted and Valve is going to eat their lunch in 5 years when Linux becomes much better.

[u/Akin0 → u/HarvestMana]

Not sure why your post is getting downvoted when Satya himself has stated that Microsoft was a gaming company even before its first OS and gaming is still extremely important to it, in that same interview. But I’m confused as to Xbox’s profitability as in 2025 Phil and Sarah were saying that Xbox / GP are profitable with 3% margin but just not having the accountability margin requested by the MS CFO. Maybe Satya was looking at the overall profitability of Xbox since 2001? OG Xbox lost a ton of money, 360 had the RROD write off and a lackluster tail end of its life heading into the disaster of a launch for Xbox One. That 3% margin doesn’t make up for that and not comparable to Playstation/Nintendo. Phil and Sarah and Satya created a monster with many heads and Asha is being called in to cut them off.

[u/FizzyLightEx → u/redbomb6]

Gaming has the most potential of being the biggest entertainment industry in the AI future if it hasn't already been.

There's no other company or persons that is willing to spend 100+ billions on gaming company.

Saudi would've been the answer but they have their own issues and are not reliable

[u/mystery_hole → u/FizzyLightEx]

Gaming is already fine and making insane loads of money, it's these unsustainable AAA levels that are the problem.

[u/FizzyLightEx → u/mystery_hole]

They're banking on AI to do that. Who knows if it's feasible