Xbox News & Analysis
3 articles
Market Mood
Microsoft (MSFT) Cuts 4,800 Jobs; Xbox Faces Major Downsizing
Microsoft (MSFT) has announced the elimination of 4,800 jobs, which constitutes 2.1% of its workforce, as part of a cost-cutting strategy. The Xbox unit will see a reduction of approximately 20% of its staff, translating to 3,200 job losses, with 1,600 cuts occurring immediately and the remainder planned through fiscal year 2027. Microsoft shares fell by 1% during Monday's trading, while the Nasdaq Composite index increased by 1%. This job reduction and the planned spin-off of four gaming studios indicate challenges for Microsoft's gaming division and may impact investor confidence.
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Microsoft (MSFT) IPO Timeline Pushed to 2027 Amid Console Price Hike
Microsoft Corporation (MSFT) is reportedly delaying the IPO of OpenAI until at least 2027, as the company re-evaluates its timeline initially set for late 2026. CEO Sam Altman aims for a valuation of $1 trillion. Additionally, Microsoft announced a $100 increase in Xbox console prices for 512 GB models and a $150 hike for 1 TB models, effective August 1. The company cited a 2.5x rise in console storage and memory costs and anticipates prices to double again by fall 2027, impacting profit margins for consoles.
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Microsoft (MSFT) Cuts Game Pass Prices to $22.99 and $13.99
Microsoft (MSFT) will reduce the price of its Game Pass Ultimate subscription from $29.99 to $22.99, and the PC Game Pass will drop from $16.49 to $13.99. This change aims to address feedback regarding pricing after a year-over-year revenue decline of approximately 10% in the gaming sector, which contributed 7% to the company's total revenue. The gaming business, expanded by the $75.4 billion acquisition of Activision Blizzard, has faced challenges, including a 32% decline in hardware sales. This restructuring follows a price increase of $10 to the Game Pass Ultimate in October 2023.
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