Microsoft Pushes Back Against Claims About Activision Blizzard Revenue
Microsoft refuted a recent report claiming the Activision Blizzard acquisition hasn't had a significant impact on Xbox Game Pass or its overall gaming business.
The company highlighted the fact that it's been reporting Xbox content and services revenue growth since Q2 2024 as evidence going against the concerning report.
New performance details regarding Microsoft's gaming division are expected to arrive as part of its next financial report, which is scheduled for January 29.
Microsoft has pushed back against a recent report stating that its Activision Blizzard acquisition hasn't had a material impact on Xbox Game Pass or its overall gaming business. And while the Xbox maker provided some evidence to substantiate this claim, up-to-date performance figures concerning its gaming division aren't expected to arrive before late January 2025.
Microsoft finalized its acquisition of Activision Blizzard King in October 2023. Valued at $68.7 billion, the purchase marked the largest deal of its kind ever completed in not just gaming but the entire tech industry. 15 months later, a report from The Information claimed that the acquisition's impact fell short of internal expectations. The media outlet cited Denny Fish, a portfolio manager overseeing approximately $800 million worth of Microsoft stock, who labeled Activision's post-acquisition performance as "disappointing." The report suggested that the ABK deal did little to drive Xbox Game Pass growth and overall had little impact on Microsoft's gaming division.
Microsoft has subsequently pushed back against these claims, with a company representative telling Insider Gaming that The Information's report is missing context. Elaborating on this point, the spokesperson highlighted that Microsoft has been reporting Xbox content and services revenue growth since Q2 2024, citing it as evidence of the acquisition's success. Over the past nine months, this segment's revenue grew by 61%, with 55 of those points being directly attributed to the impact of the impact of the Activision Blizzard acquisition, the representative said.
Activision Blizzard Labeled as the Driving Force Behind Microsoft's Recent Gaming Growth
The company has also pushed back against the suggestion that the $68.7 billion deal wasn't beneficial to its subscription service. Evidence for this was already made public back in October 2024, when Microsoft CEO Satya Nadella said that Black Ops 6 set a record for launch-day Xbox Game Pass subscribers additions, on top of being the "biggest" Call of Duty release in history. Activision Blizzard is also said to account for 85% of quarterly revenue growth for Microsoft's gaming division since Q2 2024.
Microsoft Says It Never Considered Exiting Gaming Business
The Information's report also suggested that Microsoft recently considered exiting the gaming industry, claiming Nadella said something to that effect in 2021. A company representative outright denied this in a statement to Insider Gaming. And while the Xbox hardware revenue has long been on a decline, Microsoft claims that user engagement across its gaming platforms is currently the highest it's ever been.
Up-to-date details concerning the performance of the tech giant's gaming division are expected to arrive on January 29. That's the date when Microsoft is scheduled to share its consolidated financial report for the second quarter of its fiscal year 2025, which covers the three-month period ending December 31, 2024.
