Microsoft's strong reaction to „inaccurate report.” It suggested that largest deal in gaming history didn't meet Xbox manufacturer expectations
Microsoft responded to an article suggesting that the purchase of Activision Blizzard didn't bring the company the expected benefits. In a statement, the Redmond-based giant denies the information present in the article.
In October 2023, Microsoft Corporation finalized the acquisition of Activision Blizzard. The Redmond giant paid 69 billion dollars and it was the largest transaction of this type in the history of the gaming industry. We remind you of this because a few days ago, The Information published an article claiming that Microsoft is disappointed with the results of this purchase. The company quickly reacted, trying to deny this information.
The Information raport
The editors of The Information based their info on the opinions of Danny Fish, who manages an investment fund that owns, among other things, Microsoft shares worth 800 million dollars.
- According to these reports, the corporation was hoping for a much larger increase in Xbox division revenues.
- 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.
- 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.
- 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.
- Microsoft anticipated a rise in revenue from Azure server rentals, yet Activision Blizzard still opts for competing sites from Google and Amazon.
Microsoft's reaction
Microsoft quickly responded to this article, issuing a statement in which it denied the information contained in it.
- 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.
- 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.
- 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.
So the question is: who to believe? It's worth noting that the increase in revenue and users in the ecosystem is simply a result of Activision Blizzard joining Microsoft. Even though the corporation boasts a "record growth of Game Pass," it didn't provide any specific numbers, so it's difficult to assess whether those 69 billion dollars was a sensible expenditure.
It's worth mentioning that on January 29th, Microsoft will showcase its financial results. If the company doesn't boast about the current number of Game Pass subscribers, it will increase the likelihood that The Information article contains quite a lot of truth.
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