Microsoft recently countered claims from a report suggesting that its acquisition of Activision Blizzard hasn’t substantially impacted Xbox Game Pass or its gaming business overall. They pointed out that Xbox content and services have shown consistent revenue growth since the second quarter of 2024, which contradicts the negative report. However, the gaming giant is set to release more detailed performance figures in their next financial report, expected on January 29, 2025.
Back in October 2023, Microsoft completed its acquisition of Activision Blizzard King. The $68.7 billion deal marked a record in not just the gaming industry, but the entire tech field. Fifteen months on, a report by The Information suggested this acquisition didn’t meet Microsoft’s expectations. Denny Fish, a portfolio manager managing around $800 million of Microsoft stock, described Activision’s post-acquisition performance as a letdown. The report hinted that the deal hadn’t significantly boosted Xbox Game Pass or Microsoft’s gaming business as expected.
In response, a Microsoft representative shared with Insider Gaming that such reports lacked context. The spokesperson emphasized that the company has consistently reported growth in Xbox content and services, attributing a significant portion of this success to the impact of the Activision Blizzard acquisition. In the past nine months, there’s been a 61% revenue growth in this area, with 55 points directly linked to the acquisition, according to the representative.
Microsoft has also rebuffed the notion that this massive deal didn’t enhance its subscription service. Back in October 2024, CEO Satya Nadella highlighted that Black Ops 6 had shattered records for the number of Xbox Game Pass subscribers added on its launch day, branding it the biggest Call of Duty release ever. Furthermore, Activision Blizzard is credited with being behind a substantial 85% of Microsoft’s gaming revenue growth since Q2 2024.
Addressing another claim from The Information, Microsoft refuted the suggestion that it had considered leaving the gaming industry, supposedly based on Nadella’s comments from 2021. A company spokesperson flatly denied these allegations to Insider Gaming. While Xbox hardware revenue has experienced a decline, Microsoft insists that user engagement across their gaming platforms has reached record levels.
Fresh insights into Microsoft’s gaming division performance are anticipated on January 29, when they plan to release their financial report for the second quarter of fiscal year 2025, covering the three months ending December 31, 2024.
