Microsoft Challenges Allegations Regarding Activision Blizzard’s Earnings

Microsoft recently pushed back on a report claiming its monumental acquisition of Activision Blizzard hasn’t significantly boosted Xbox Game Pass or its broader gaming division. The tech giant countered by pointing to consistent growth in Xbox content and services revenue since the second quarter of 2024, indicating a positive trend that contradicts this report. Enthusiasts and analysts eager for more concrete performance data will have to wait until Microsoft’s upcoming financial disclosure, set for January 29.

Having closed the massive $68.7 billion deal in October 2023, Microsoft inked history with the largest acquisition in tech, let alone gaming, only to face criticism 15 months later. According to The Information, despite Microsoft’s internal projections, the acquisition didn’t fuel expected growth, referencing Denny Fish, a portfolio manager with substantial Microsoft shares, who called the deal’s outcomes “disappointing.” The allegations claim the transaction did little to drive Xbox Game Pass numbers or significantly enhance Microsoft’s gaming footprint.

However, Microsoft has firmly rejected these assertions. A spokesperson told Insider Gaming that The Information’s narrative misses critical context, highlighting that since Q2 2024, revenue from Xbox content and services has seen a robust boost—a 61% increase, with most of that growth, approximately 55 points, credited directly to the Activision Blizzard acquisition.

In disagreement with the notion that the $68.7 billion deal lacked meaningful impact, Microsoft has been vocal. Back in October 2024, CEO Satya Nadella celebrated the release of Black Ops 6 as the record-holder for driving new subscribers to Xbox Game Pass at launch, marking the largest Call of Duty debut to date. Additionally, it’s been reported that Activision Blizzard has contributed a hefty 85% to Microsoft’s gaming revenue growth since the acquisition’s integration.

The same report speculated that Microsoft once contemplated leaving the gaming industry altogether, a claim tied to alleged remarks by Nadella from 2021. Microsoft refuted this through a statement to Insider Gaming, clarifying there were no such plans. While the hardware revenue from Xbox has been on the decline, user engagement across all of Microsoft’s gaming services reportedly reached its peak, demonstrating sustained interest and activity in their gaming offerings.

For those tracking Microsoft’s financial trajectory, particularly within the gaming arena, the much-anticipated second-quarter fiscal year 2025 report will be unveiled on January 29. This report will cover the last quarter’s performance, ending December 31, 2024, and potentially provide more clarity on Microsoft’s gaming strategy and the real impact of the Activision Blizzard acquisition.