The 30% contribution margin commitment effectively meant that Xbox could only manufacture and sell a limited number of consoles each year or they would quickly sink their P&L. Funny how the press got wind of the 30% contribution margin commitment that likely drove Phil crazy and ultimately out but haven't put 2 and 2 together to understand that MSFT's AI investment addiction practically left the Xbox team unable to make and sell the very consoles they depend on to sell their games. Phil dropped exclusivity and sold on Steam and Playstation as a means to monetize the games they were making because he had no choice. I'm super eager to see how new management will try to alter the internal pressures applied by Amy Hood and the finance team which are perverting any ambition Xbox and MSFT's numerous game studios have to be relevant in the market going forward.
The 30% contribution margin commitment effectively meant that Xbox could only manufacture and sell a limited number of consoles each year or they would quickly sink their P&L. Funny how the press got wind of the 30% contribution margin commitment that likely drove Phil crazy and ultimately out but haven't put 2 and 2 together to understand that MSFT's AI investment addiction practically left the Xbox team unable to make and sell the very consoles they depend on to sell their games. Phil dropped exclusivity and sold on Steam and Playstation as a means to monetize the games they were making because he had no choice. I'm super eager to see how new management will try to alter the internal pressures applied by Amy Hood and the finance team which are perverting any ambition Xbox and MSFT's numerous game studios have to be relevant in the market going forward.
Says a lot about what the future is for xbox based on who they replaced Phil with. Microsoft is going all in on AI
This doesn't bode well at all.