At the start of the week, a paid article published in the columns of the media The Information highlighted several elements that were not encouraging for Xbox, such as the acquisition of Activision Blizzard which had not resulted in “the growth expected by Microsoft for its activity Xbox”, or that the video game had almost been completely abandoned by the firm in 2021. News which made the headlines of several sites, causing the main stakeholders to react.
Microsoft denies everything and reaffirms its investment in video games
In an Insider Gaming article, representatives from Activision and Microsoft provide several details on the subject, declaring in particular that The Information’s report is not accurate and that “by omission, it gave a false image of the company”.
It is true that in its last four financial reports, Microsoft reported an increase in revenue from Xbox, mainly thanks to Activision. As is known, in the second quarter of fiscal year 2024, revenues from these contents and services increased by 61%, with 55 points attributed to the net impact of the Activision acquisition.
In the following quarter, revenue grew 62% compared to 2023, with 61 points linked to Activision. For the fourth quarter of fiscal year 2024, the increase was 61%, with 58 points coming from the buyback. Finally, in the first quarter of fiscal year 2025, revenue increased by another 61%, with 53 points also directly linked to Activision. Activision is therefore the main key to Xbox’s revenue growth, by far.
No, Microsoft did not come close to abandoning gaming in 2021
Microsoft also categorically refutes the assertions according to which Satya Nadella, the CEO of the company, would have considered in 2021 “abandoning the video game sector”, notably highlighting comments from Nadella at that time attesting that Microsoft was making a “all in” in gaming.
Microsoft also highlighted that engagement on Xbox platforms was “at an all-time high”, with more than 500 million monthly players and consistent growth in cloud users over the past year.
-Finally, in response to criticism related to the impact of Azure servers and the fact that the agreement with Activision would not be a catalyst encouraging other studios to release their games in Xbox Game Pass, Microsoft specifies that the agreements are ” flexible”, allowing developers to be paid in advance according to their preferences.
[Le rapport de The Information] conflates the view that developers are afraid of profit losses with the fact that the company is already willing to pay developers up front if it is their choice to structure the deal.
As always, it is important to maintain a critical mind in this type of situation, since Microsoft and Activision are obviously not going to confirm reports criticizing their interests. It nevertheless remains interesting that companies provide context to what was said earlier this month, and trigger strong reactions on the web.
Microsoft will reveal its results for the second quarter of fiscal year 2025 on January 29 and we will logically have new information on the situation of the company, and more particularly of Xbox.
