Microsoft’s strong reaction to „inaccurate report.” It suggested that largest deal in gaming history didn’t meet Xbox manufacturer expectations

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In October 2023, Microsoft Corporation completed the acquisition of Activision Blizzard at a whopping cost of $69 billion. This was the biggest deal of its kind in the gaming industry’s history. We bring your attention to this event as recent reports suggest otherwise. The Information recently published an article stating that Microsoft is allegedly dissatisfied with the outcomes of this acquisition, prompting a swift response from the company aiming to refute these claims.

The Information raport

According to The Information’s editorial team, they sourced their data from the views of Danny Fish, a manager of an investment fund that holds approximately $800 million in Microsoft stocks among its assets.

  1. According to these reports, the corporation was hoping for a much larger increase in Xbox division revenues.
  2. Expectations were primarily related to a significant increase in the number of Game Pass subscribers, which was supposed to be ensured by games such as Diablo IV and Call of Duty: Black Ops 6. The article suggests that these hopes, however, weren’t fulfilled.
  3. The Redmond giant also hoped that launching major games on Game Pass would motivate other industry leaders to offer their titles on this platform. However, they weren’t interested in this, especially for the price that Microsoft was proposing.
  4. The corporation had planned to reach 100 million subscribers by 2030, but this no longer seems realistic. A year ago there were only 34 million of them and for two years the company hasn’t been able to achieve its growth targets.
  5. Microsoft anticipated a rise in revenue from Azure server rentals, yet Activision Blizzard still opts for competing sites from Google and Amazon.

https://youtube.com/watch?v=-55251

Microsoft’s reaction

Microsoft promptly issued a statement refuting the details presented in the article.

  1. Starting from mid-2023, the Xbox division’s revenues were anticipated to rise by more than 60%, with the majority of this increase credited to Activision Blizzard.
  2. Furthermore, Microsoft CEO, Satya Nadella, claims that the Xbox ecosystem currently has a record number of players, and the release of Call of Duty: Black Ops 6 has led to a record increase in the number of Game Pass subscribers.
  3. Microsoft also denies the claims in the article that in 2021 they considered withdrawing from the gaming market. The company also assures that there are currently no such plans.

The question arises: who should we trust regarding the financial performance? It’s important to clarify that the surge in revenue and user base within the ecosystem is primarily due to Activision Blizzard merging with Microsoft. Despite the company claiming a “record expansion of Game Pass,” they didn’t disclose specific figures, making it challenging to determine if the 69 billion dollars spent was a prudent investment.

It’s noteworthy that on January 29th, Microsoft is expected to present its financial report. If the company chooses not to disclose the current number of Game Pass subscribers during this presentation, it could make The Information’s article more credible.

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2025-01-17 14:32