Microsoft was reportedly using profits earned by Minecraft to fund Xbox and the rest of its gaming portfolio.
According to Bloomberg reporter Cecilia D’Anastasio, profits generated by Minecraft were being used to fund the rest of Microsoft’s Xbox gaming portfolio. Citing a person familiar with Xbox operations, the report states that revenue from Mojang’s blockbuster sandbox game played a major role in financing other projects across the company’s lineup of studios and franchises.
The report comes alongside Microsoft’s announcement of major layoffs affecting approximately 3,200 Xbox employees, around 20% of the gaming division, as the company attempts to reverse years of costly expansion focused on its Game Pass subscription service. According to Bloomberg, Microsoft spent nearly 80 billion US Dollars over the past decade acquiring major publishers and studios, including Activision Blizzard for 69 billion US Dollars and ZeniMax Media for 7.5 billion US Dollars. The strategy was designed to strengthen Xbox Game Pass by offering subscribers a vast library of games, including new day one releases.
However, the subscription service reportedly failed to meet Microsoft’s expectations. Internal targets were set at 77 million Game Pass subscribers by the end of fiscal year 2026, but the service currently sits at roughly 30 million subscribers, according to Bloomberg’s sources. The report also notes that subscriber numbers have declined since Microsoft last disclosed figures in 2024.
A major criticism of the Game Pass strategy was the decision to release expensive first-party titles day one at launch. Some employees reportedly felt that doing so serves to reduce full-price game sales. According to a prior Bloomberg report. Microsoft sacrificed more than 300 million US Dollars in Call of Duty sales on Xbox consoles and PC in 2024 after taking up this approach.
As Xbox reevaluates its business model, Minecraft appears set to become even more central to the company’s future. Its consistent profitability has reportedly helped support investment across the Xbox portfolio. Developer Mojang will now report directly to recently appointed Xbox CEO Asha Sharma.
