Key Takeaways
1. Machine Games reported a net margin of 6% for 2024, with net sales of $44.325 million and a net profit of $2.679 million.
2. The financial report does not specify the success or failure of individual games, including Indiana Jones and the Great Circle, due to its launch on Xbox Game Pass.
3. Operating expenses for Machine Games reached $41.53 million, highlighting the challenges in profitability amid high development costs.
4. The studio’s net sales decreased from a peak of $49.1 million in 2021, indicating a decline despite a major game release.
5. Future job cuts and increased pressure for profitability are anticipated within Microsoft’s Xbox division, affecting the direction of projects and studios.
Machine Games, the Swedish team known for the Wolfenstein series and the well-received Indiana Jones and the Great Circle, has reported a modest 6% net margin for the year 2024.
Financial Findings
The financial details were uncovered by Timur222 and shared by Derek Strickland from TweakTown on X on July 20. For 2024, Machine Games noted net sales of $44.325 million and a net profit of $2.679 million.
Challenges Ahead
This year has been tough for Xbox’s first-party studio, which received praise for its stunning Ray-Tracing and visual fidelity, especially in the introductory sequence of Raiders of the Lost Ark.
However, the financial report doesn’t clearly indicate any triumph or failure of specific games or projects from Machine Games. This ambiguity arises because Machine Games is a subsidiary of ZeniMax Media, which encompasses all entities under Bethesda, including Arkane, BGS, id Software, and ZeniMax Online.
Revenue Uncertainties
The revenue from Indiana Jones and the Great Circle is somewhat unclear in the 2024 financial overview, as the game launched on Xbox Game Pass from day one, which often leads to decreased direct sales. The report also stated that operating expenses reached $41.53 million, leaving minimal room for profit in an industry where development budgets can quickly exceed $100 million.
In contrast, Machine Games hit a peak net sales figure of $49.1 million in 2021, highlighting that 2024 represented a decline even with a significant AAA launch. The studio’s 6% revenue margin is quite low compared to other big players like Nintendo, which announced a 30% profit on $11.6 billion in revenue for the 2024 fiscal year.
Future Prospects
With over 9,100 layoffs at Microsoft in recent times, further job cuts seem likely. Margins are becoming increasingly important, and pressure is mounting on various developers under Microsoft’s Xbox division, even as reports suggest that comparisons are being made to Microsoft’s more profitable Azure business segment.
While ZeniMax Media generally enjoys some freedom from Microsoft’s oversight regarding financial matters and staffing, the fate of project cancellations and studio closures ultimately lies with Xbox and Microsoft. This has put them in a position to focus on maximizing profits since the beginning of 2025.
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