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

Image: Push SquareXbox has undoubtedly become one of the biggest publishers on PlayStation – but it may not be entirely through choice.

A new article from Bloomberg (paywalled) delves into the business decisions behind Microsoft’s sudden multiformat move, and while little of it will surprise, it does add clarity to one of the most shocking transitions in recent industry memory.

The report, from the ever-reliable Jason Schrier, claims that in late 2023 – following its acquisition of Activision Blizzard – Microsoft bean counters imposed a 30% profit margin target on the division.

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This, according to those in the know, is far above the industry average of between 17% and 22%.

Sony, which has significantly improved its profit margins since concluding its acquisition of Bungie, achieved around 16% profit margin for Q1 2025. This obviously gives you a good indication of how big the demands on Microsoft’s gaming arm are.

The firm has responded by closing studios, cutting thousands of staff, and cancelling projects. It’s also started porting its entire catalogue to PS5, with titles like Forza Horizon 5 proving a massive success on Sony’s machine.

It’s claimed that Indiana Jones and the Great Circle, which launched several months prior on Xbox and PC, sold best on PlayStation.

In addition, Bloomberg reports that the firm is increasingly focusing on cheap to make games, or those it expects are guaranteed to turn a profit. This would partially explain the cancellation of titles like Perfect Dark and Everwild, which may have been considered riskier investments.

To make matters worse, the Redmond firm’s emphasis on Game Pass is not helping its position.

By including its first-party games in a subscription, experts argue it’s impacting full-price sales.

The company has introduced a system to remunerate developers based on hours played, but this obviously favours long-tail like multiplayer titles over single player stuff such as Senua’s Saga: Hellblade 2.

It’s not really clear from the reporting whether Microsoft plans to relax these profit margin targets in the future, but we suspect more changes may be required if it doesn’t.

And this, folks, is why industry consolidation is not a good thing.

We now effectively have one giant mega-corporation controlling the fate of dozens of studios, and if Xbox can’t figure out a way to make all this work, we’re not convinced all of those teams have a future.