There’s a famous saying that there’s no ethical consumption under capitalism. Wherever you spend your money, businesses aim to increase profits and decrease costs, no matter what that might mean for their consumers – the people driving that profit. We know that the larger the company, the more important it is to manage those profit margins, because we’re not talking about thousands of dollars at stake — we’re talking billions. Microsoft is a great example of this, and recent reports say that at a time when fans are questioning the company’s gaming strategy, those at the head of the organization are seeking profit margins beyond what’s normal for the games industry.

According to Bloomberg, Xbox’s recent moves have been a coordinated effort to boost profit margins. The company is targeting 30% as its profit margin, which analysts told Bloomberg is higher than the typical 17-22% most video games industry businesses aim to achieve. Recently, Xbox hit a 12% profit margin in 2022, via recent leaked documents from the FTC case launched during Microsoft’s acquisition of Activision Blizzard. When we look at things like a 33% increase in Game Pass Ultimate or the price increase of consoles, we now know if this is the strategy from Xbox, then tariffs are only a part of the story.

Microsoft’s aim to earn more than its expenses and investments in gaming is how every business operates. You look to increase margins and control costs as much as possible to bring in more money and increase your value year over year. These recent moves from Xbox, including bringing games to PlayStation or bringing Xbox Cloud Gaming to devices like Samsung and Apple products, can certainly make that happen. The issue becomes whether it’s achievable without damaging its reputation, which, despite plenty of great games in 2025, is going through quite a rough patch.

If you read any of my writing, you’ll know that Xbox is my main gaming ecosystem when you exclude Nintendo. I’ve been steadily wondering what the future looks like for gamers like me who have so much invested in this digital space. For many online, the price increase for Game Pass was tough to swallow, but a case could be made that it’s still the best value in gaming. How does an argument like that resonate with players when the company isn’t increasing its pricing to reflect the value they’ve demonstrated, but rather because it has raised its profit goals to lofty, industry-topping expectations? It’s hard to imagine those who aren’t as entrenched in Xbox as I and others are will want to stick around.

Let us know in the comments how you see this Xbox decision to raise profit margin expectations affects the company’s brand.

Phenixx Gaming is everywhere you are. Follow us on Facebook, Twitter, and Instagram.

Also, if you’d like to join the Phenixx Gaming team, check out our recruitment article for details on working with us.

Phenixx Gaming is proud to be a Humble Partner! Purchases made through our affiliate links support our writers and charity!