Xbox under pressure from Microsoft over profits as handheld console teased again-Adam Starkey-Entertainment – Metro

An Xbox handheld is practically guaranteed (Microsoft)

Microsoft has forced ‘challenging’ revenue and profit goals on Xbox, as the company prepares for a Tokyo Game Show presentation.

As sales for the Xbox Series X/S lag far behind Sony and Nintendo, it’s clear Microsoft is trying to expand its revenue streams beyond its consoles – between putting its Xbox Game Pass subscription service on other devices, raising the prices, and releasing Xbox exclusive games on other, more popular, platforms.

The chase for profits has also led to some huge acquisitions, including Bethesda and Activision Blizzard – with the latter buyout helping Xbox to stay in the black, in its latest financial report.

A new interview has shed further light on the motivations behind Xbox’s current direction, as sources claim the company is facing particularly ‘challenging’ profit goals from Microsoft.

As reported by Bloomberg, in a profile interview with Xbox president Sarah Bond, it claims Microsoft’s ‘gaming unit is operating under a challenging set of revenue and profit goals, according to people familiar with Xbox’s business’.

While there’s no comment from Bond on these claims, she acknowledges the challenges facing Xbox and believes it would be a mistake to act conservatively, saying: ‘The opportunity on the other side is way bigger for all of us.’

A new Xbox Series X is coming out later this year (Microsoft)

Even without concrete numbers of the financial goals, Xbox’s $68.7 billion (£56 billion) acquisition of Activision Blizzard has likely drastically inflated Microsoft’s expectations for Xbox moving forward – given it now owns financial juggernaut Call Of Duty.

The raised goals are also perhaps why Xbox has increased the prices of Game Pass, with the next Call Of Duty instalment, Black Ops 6, set to be locked behind the more expensive Ultimate tier at launch on October 25.

What do we know about Xbox’s next gen console?

It remains to be seen whether this strategy will boost subscriber numbers for Xbox Game Pass, and in turn profits, but the company isn’t leaving the hardware business behind.

Over the past year, Microsoft has repeatedly discussed its plans for the next generation, promising it will be ‘the biggest technological leap ever’ between consoles – which on the face of it seems unrealistic.

Microsoft Gaming CEO Phil Spencer has already suggested a handheld device will be part of Xbox’s next generation plans, and now Bond has commented on the idea, albeit in somewhat vague terms.

According to Bloomberg’s report, Bond ‘talks about a handheld device as another way to insert an Xbox-specific experience into the lives of future gamers whose habits have yet to be formed’. She is then quoted as saying: ‘I want people to think no matter who you are, you can come to Xbox and a find a game. It’s for you.’

At this point, it’s abundantly clear Xbox is developing a handheld console, but it’s less certain whether this will be separate from another console, or act like a hybrid in the same vein as the Nintendo Switch.

A recent rumour suggests Sony is planning two console variants in its next generation plans, which could include a handheld, so it sounds like both companies could be following the same strategy.

Whether any of this will result in Xbox having a successful console remains to be seen (probably not until 2026), but Bond has acknowledged that she’s ‘making decisions now that we’re going to live with in the next decade’, so it seems like there’s an awareness of the stakes.

As for the near future of Xbox, the company is set to stage a presentation at the Tokyo Game Show on Thursday, September 26 at 11am BST. It will be streamed across the Xbox social channels and the show’s official YouTube.

Indiana Jones And The Great Circle is out on Xbox this year (Bethesda)

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