2 1 Shi Ji Jing Ji Bao Dao·2025-05-15 08:04Core Viewpoint - Microsoft announced a 3% workforce reduction affecting all levels and departments, including its gaming divisions, despite a 5% year-over-year revenue growth in gaming for Q3 FY2025 [1][3] Group 1: Layoffs and Restructuring - Microsoft has conducted multiple rounds of layoffs in its gaming division from 2023 to 2024, including a 4.5% workforce reduction affecting 10,000 employees in January 2023 and a subsequent layoff of 1,900 employees after acquiring Activision Blizzard [2][4] - The gaming division's head, Phil Spencer, stated that layoffs were part of prioritizing and ensuring optimal growth directions after assessing redundancies [2] - Following these layoffs, Microsoft still employs over 20,000 staff in its gaming division, significantly more than competitors like EA, which has 13,000 employees [2] Group 2: Financial Performance - In Q4 FY2024, Xbox content and services revenue grew by 61%, and even excluding Activision Blizzard's contributions, it still saw a 3% year-over-year increase [3] - The Q3 FY2025 report indicated a 5% year-over-year growth in gaming revenue, with Xbox content and services revenue specifically increasing by 8% [3] - The growth in gaming revenue is primarily attributed to strong performances from key titles like "Call of Duty" and "Minecraft," which are closely tied to Xbox's subscription services [3] Group 3: Market Challenges - Despite growth, Microsoft's gaming division faces challenges, including a 6% year-over-year decline in Xbox hardware revenue for Q3 FY2025 [6] - The Xbox Series S|X is lagging behind competitors, with PS5 sales exceeding 77.8 million units and Nintendo Switch surpassing 152 million units, indicating a significant market disadvantage for Xbox [6] - Upcoming competition from the Nintendo Switch 2 and potential price increases due to tariffs on gaming hardware pose additional risks to Xbox's market position [7][8] Group 4: Strategic Focus - Microsoft plans to focus resources on key products and services, which may lead to further layoffs in less critical development areas [3][4] - The company has announced price increases for Xbox Series X and S consoles, reflecting rising development costs and market conditions [8] - The Xbox Game Pass (XGP) subscription service has surpassed 50 million users, positioning Microsoft favorably in the subscription market and providing a potential avenue for revenue stability [8]