{"id":926232,"date":"2026-08-10T14:12:36","date_gmt":"2026-08-10T19:12:36","guid":{"rendered":"https:\/\/newsycanuse.com\/index.php\/2026\/08\/10\/microsoft-ceo-complains-about-poor-gaming-profits-theres-more-monetization-of-xbox-games-happening-on-youtube\/"},"modified":"2026-08-10T14:12:36","modified_gmt":"2026-08-10T19:12:36","slug":"microsoft-ceo-complains-about-poor-gaming-profits-theres-more-monetization-of-xbox-games-happening-on-youtube","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2026\/08\/10\/microsoft-ceo-complains-about-poor-gaming-profits-theres-more-monetization-of-xbox-games-happening-on-youtube\/","title":{"rendered":"Microsoft CEO Complains About Poor Gaming Profits: \u2018There\u2019s More Monetization Of Xbox Games Happening On YouTube\u2019"},"content":{"rendered":"
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Are we at a big inflection point for Xbox<\/a> or is Microsoft just going to double down on what it\u2019s been doing until things magically turn around, or it decides to spin off the gaming business altogether? That\u2019s one of the questions that has arisen out of the recent whiplash between a great Xbox showcase last weekend and a harsh memo from Xbox CEO Asha Sharma promising a \u201creset\u201d later that same week<\/a>. Microsoft CEO Satya Nadella was asked what the model will be for its gaming business moving forward during a recent live event and while he didn\u2019t offer many fresh clues, he certainly sounded disappointed that Xbox is so bad at making money.<\/p>\n

\u201cThe challenge now for us is to think about how do you innovate both in hardware as well as in the games going forward in a world in an economically viable way,\u201d he said on stage at The New York Times<\/em> Hard Fork event on June 10<\/a>. \u201cI think one of the things that Asha, who has just taken over Xbox, put out is that we\u2019ve invested a lot. No one can accuse Microsoft of not having invested for the last 25 years. And now we have to turn this into a sustainable business that delivers what is fundamentally one of the best sources of entertainment.\u201d<\/p>\n

He continued:<\/p>\n

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Still the challenge we have is we\u2019ve not been monetizing that entertainment. In fact, if anything, we\u2019ve been subsidizing that entertainment. In fact, there\u2019s more monetization of Xbox games happening on YouTube than at Microsoft. And so that doesn\u2019t mean we go do things that are unnatural. We want us to do what is really our job, which is to build great games, build great hardware, but we\u2019ve got to do it in an economically sustainable way. So, I think Asha is really, 100 days in, and she put out a post saying in the next 100 days, she\u2019s going to take a fresh look and make sure we deliver on what our fans expect of us both on the hardware side or on the publishing side.<\/p>\n<\/blockquote>\n

The context around the discussion was Sharma\u2019s unprecedentedly frank announcement last week that Xbox\u2019s current accountability margins are only 3 percent, meaning that all of the money currently being spent on the business would actually be more profitable sitting in an index fund somewhere. That and the fact that the AI race, which the bulk of Microsoft\u2019s business is invested in right now, is fueling historic spikes in prices for the components used to make gaming hardware. How do you launch a new console generation\u2013Project Helix\u2013into that environment and expect to succeed?<\/p>\n

Nadella didn\u2019t share a magic solution. \u201cI think we have to find ways to deliver the games in which it is economically relevant for the customer and for us, so today there\u2019s an issue, in fact, unfortunately, because of what\u2019s happening with the cloud and AI, the prices have gone up, right?\u201d he said. \u201cIt\u2019s happening with PCs, it\u2019s happening with phones, Xbox is impacted as well, so the scarcity of the semiconductor supply and memory in particular are having a massive impact on consumer electronics all up. That\u2019s a temporal thing that I think we\u2019ll get through, it is not going to be permanent, but there is a permanent thing which is what\u2019s the Xbox model going forward and that\u2019s where, if you think about it like PCs and consoles, both have their place obviously mobile has people playing elsewhere and so we have to now bring it all together while staying true to what we\u2019ve always done.\u201d<\/p>\n

There are a couple of different ways to interpret all of this. The first is that this is just some media-trained gobbly gook you say on stage to make clear you understand the challenges facing Xbox without actually revealing any secret insights or master plan. The second is that Microsoft doesn\u2019t know the answers to this yet and isn\u2019t prepared to start signaling big strategy shifts until it has completed the latest round of mass layoffs and cuts across its sprawling gaming business<\/a>.<\/p>\n

Here are two other reads. Nadella is getting impatient that Xbox has been given over $80 billion in capital to acquire studios and publishers over the last decade and is still in third-place with terrible profit margins. Valve collects commissions<\/a> by selling other people\u2019s games on Steam. YouTube has a massive ad business built around creators making content around games, many of which were shipped by Microsoft (RIP Mixer<\/a>). And here the company is on the cusp of the next console generation without a moat of its own: a lasting, structural advantage to help it make lots of money over the next five years.<\/p>\n

Microsoft has all of these valuable pieces\u2013Candy Crush<\/em>, Call of Duty<\/em>, Game Pass, xCloud, hardware<\/a>\u2013but it hasn\u2019t been able to make them fit together in a way that prints money. \u201cBring it all together while staying true to what we\u2019ve always done\u201d sounds like a Herculean task, and one the Phil Spencer administration couldn\u2019t figure out either. We\u2019ll see if there\u2019s a new secret sauce this time around, or if the solution is just going to be more rounds of ugly cuts without fundamental improvements to the hardware Microsoft ships or the games you can play on it<\/a>.<\/p>\n<\/p><\/div>\n

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Are we at a big inflection point for Xbox or is Microsoft just going to double down on what it\u2019s been doing until things magically turn around, or it decides to spin off the gaming business altogether? That\u2019s one of the questions that has arisen out of the recent whiplash between a great Xbox showcase […]<\/p>\n","protected":false},"author":1,"featured_media":926233,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2953,78,104640],"tags":[],"class_list":["post-926232","post","type-post","status-publish","format-standard","has-post-thumbnail","category-complains","category-microsoft","category-youtube-videos"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/926232","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/comments?post=926232"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/926232\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/926233"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=926232"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=926232"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=926232"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}