Satya Nadella said Xbox must pursue economically viable growth after years of heavy investment with limited returns. He spoke at The New York Times Hard Fork event on June 10.
Nadella noted that Microsoft has poured resources into Xbox for 25 years yet has struggled to monetize the platform effectively. He pointed out that more revenue from Xbox games flows through YouTube than through Microsoft itself.
Xbox accountability margins stand at just 3 percent, according to recent internal assessments. New Xbox leader Asha Sharma, 100 days into her role, plans a review over the next 100 days to address hardware and publishing expectations.
Rising costs tied to AI and cloud computing have driven up semiconductor and memory prices, complicating plans for the next console generation. Nadella stressed the need to combine elements such as Game Pass, hardware, and titles like Call of Duty into a single profitable structure without abandoning core priorities.
