Microsoft's gaming division is facing a crisis, with a low 3% profit margin and declining revenues. Xbox leaders Asha Sharma and Matt Booty have laid out the problems in a brutal self-assessment, citing being "over extended" by acquisitions like the $69 billion Activision deal.
The division's spending spree, including $20 billion on acquisitions and investments over five years, has not yielded the desired results. Instead, gaming revenues are down nearly $500 million compared to five years ago.
The leaders are calling for a "wholesale Xbox reset" to address the issues, which they say necessitates a fundamental change in the division's approach.
