Microsoft once set an unrealistically high profit target for the Xbox division.This decision by the CFO is likely to be the main reason for the company's current internal chaos.

Microsoft's gaming division's moves have been controversial for some time, and with the completion of its acquisition of Activision Blizzard, things seem to be getting messier.In the two years since the acquisition was completed, the outside world has continued to hear news of large-scale layoffs, studio closures, or the cancellation of potential projects at the giant's studios.Recently, the Xbox Game Pass subscription price has increased significantly, which has also made players deeply dissatisfied.

It seems that all of this chaos and radical reorganization may have stemmed from the decisions of one man—and that man was not Phil Spencer.

According to industry insiders, in the fall of 2023, Microsoft set a goal for the Xbox division: for a company with middling performance, this goal is almost impossible to achieve.Microsoft Chief Financial Officer Amy Hood made it clear that the profit margin of the gaming department must reach 30%.

This goal is well above the industry average.S&P Global Market Intelligence estimates that the video game industry's average profit margin has ranged from 17% to 22% in recent years.Therefore, the goals set by Hood can only be achieved by the top performing companies in the industry.

According to official court documents, in the first nine months of fiscal year 2022, Microsoft's gaming division's profit margin was only 12%.In other words, the CFO's intention is to more than double the unit's profit margins.

Unofficial sources indicate that developers working with the Redmond-based tech giant are not required to meet specific profit targets until 2023; instead, they can focus on developing the best possible games without worrying about financial constraints.Today, while not every project is required to achieve a 30% profit margin, Xbox-related teams are encouraged to work toward this goal.

Industry insiders believe that in the future, Microsoft may prioritize smaller game projects that are more likely to earn high profits quickly.In addition, the department responsible for Xbox hardware production may undergo a "complete overhaul."

For many gamers, Phil Spencer, CEO of Microsoft's gaming division, is almost synonymous with all of the company's controversial moves in recent years - after all, he is the "face" of the tech giant's gaming division and often makes public appearances.But according to some industry reporters, Spencer is actually the only reason why Xbox still retains "a remnant of its former glory."

"Everyone owes Phil an apology," said Windows Central's Adam Hales. "Even though the Xbox is now scarred, it's probably all thanks to him that it's still here."

Judging from the latest reports, it seems that the person who is really "giving the orders" and making a series of controversial decisions is Amy Hood.Some players believe that she and Microsoft CEO Satya Nadella are ruining Xbox by choosing a bad business model and focusing on AI development.

On the other hand, some players are still dissatisfied with Phil Spencer's approach, calling him a "yes man" who only blindly follows the orders of his superiors such as Amy Hood.Now, people are beginning to wonder: Who is the real "main pusher" within Microsoft? Who is doing the most damage to the Xbox brand?