Microsoft Challenges Claims Regarding Activision Blizzard’s Revenue

Microsoft has recently dismissed claims that its purchase of Activision Blizzard hasn’t significantly influenced Xbox Game Pass or its overall gaming business. The tech giant defends its stance by pointing to revenue growth in Xbox content and services since the second quarter of 2024, challenging the report’s assertions. However, we won’t get fresh data regarding Microsoft’s gaming division performance until the next financial report comes out on January 29.

Microsoft closed the colossal $68.7 billion deal to acquire Activision Blizzard King back in October 2023, marking an unprecedented transaction in the tech sector. Despite the grand scale of this move, a report from The Information surfaced 15 months later, suggesting that the acquisition hadn’t met Microsoft’s expectations. It even quoted Denny Fish, a portfolio manager in charge of $800 million in Microsoft shares, who described Activision’s post-acquisition performance as underwhelming. The report indicated that the deal hadn’t notably boosted Xbox Game Pass growth nor had it significantly impacted Microsoft’s gaming division as a whole.

In response to these claims, Microsoft countered through Insider Gaming, arguing that the report lacked essential context. The company pointed out that Xbox content and services have consistently demonstrated revenue growth since Q2 2024, attributing about 61% of the increase directly to the impact of the Activision Blizzard acquisition.

Activision Blizzard has been recognized as the engine behind Microsoft’s recent surge in gaming growth. Evidence of the acquisition’s benefits was highlighted back in October 2024, when Microsoft CEO Satya Nadella shared that Black Ops 6 experienced record-breaking numbers of new Xbox Game Pass subscribers on its launch day and marked the largest Call of Duty release in history. Since Q2 2024, Activision Blizzard has been responsible for a whopping 85% of quarterly revenue growth for Microsoft’s gaming sector.

The same report from The Information speculated that Microsoft might have been considering an exit from the gaming scene, based on comments supposedly attributed to Nadella in 2021. Microsoft firmly refuted this, stating via Insider Gaming that it has no plans to leave the gaming arena. Although sales of Xbox hardware have been on a downward trend, Microsoft insists that user engagement on its gaming platforms is at an all-time high.

We’re anticipating new insights into Microsoft’s gaming division performance on January 29, aligning with the release of its comprehensive financial report for the second quarter of fiscal year 2025, covering the period ending December 31, 2024.