This Is Why Xbox Is Bringing All of Its Games to PS5 Now

Xbox has indisputably emerged as one of the largest publishers on PlayStation – although it may not be entirely by preference.

A recent article from Bloomberg (paywalled) examines the corporate choices behind Microsoft’s abrupt multiformat approach, and while most of it won’t come as a surprise, it does provide insight into one of the most astonishing shifts in recent industry history.

The report, by the consistently trustworthy Jason Schrier, asserts that in late 2023 – following their acquisition of Activision Blizzard – Microsoft’s financial analysts set a 30% profit margin goal for the division.

This, as per insider information, is considerably above the industry average of between 17% and 22%.

Sony, which has substantially enhanced its profit margins since completing its acquisition of Bungie, achieved about 16% profit margin for Q1 2025. This clearly indicates the magnitude of the demands placed on Microsoft’s gaming sector.

The company has reacted by shutting down studios, reducing its workforce, and halted projects. It has also commenced transitioning its entire library to PS5, with titles such as Forza Horizon 5 achieving great success on Sony’s platform.

Reports indicate that Indiana Jones and the Great Circle, which was released a few months earlier on Xbox and PC, sold best on PlayStation.

Furthermore, Bloomberg mentions that the company is increasingly concentrating on inexpensive-to-produce games or those it anticipates will definitely yield profit. This would partially elucidate the cancellation of projects like Perfect Dark and Everwild, which may have been viewed as riskier ventures.

To complicate matters further, the Redmond corporation’s focus on Game Pass is not aiding its situation.

By offering its first-party titles in a subscription model, analysts argue it’s affecting traditional sales.

The organization has implemented a system to compensate developers based on hours played, but this clearly advantages long-tail multiplayer games as opposed to single-player experiences like Senua’s Saga: Hellblade 2.

It’s unclear from the reporting whether Microsoft plans to ease these profit margin goals in the future, but we speculate that additional modifications may be necessary if it does not.

And this, everyone, is why consolidation within the industry is detrimental.

We now essentially have one colossal mega-corporation deciding the fate of numerous studios, and if Xbox cannot devise a method to make this work, we are not optimistic about the future of all those teams.