Microsoft’s Acquisition of Activision Blizzard Drives Gaming Revenue Growth
In a testament to the success of Microsoft’s acquisition of Activision Blizzard, the company’s gaming revenue has seen a significant surge. The latest financial results for Microsoft’s second fiscal quarter of 2024 (ending on December 31, 2023) reflect the impact of the acquisition, with a 49% year-on-year increase in gaming revenue, reaching $7.1 billion. This growth has propelled the gaming industry to become the third-largest segment of Microsoft’s business, trailing only the Office and cloud divisions.
According to industry analyst MauroNL’s research on X, Microsoft has disclosed in its recent 10-Q filing that the value of the Activision Blizzard acquisition now stands at $75.4 billion, surpassing the initial 2022 forecast of $68.7 billion when the deal was first announced.
Activision Blizzard joined Xbox Game Studios in October of the previous year, influencing Microsoft’s financial performance for the last quarter. During that period, revenues amounted to $2.1 billion, with operating losses of $437 million. Interestingly, while hardware sales for Xbox saw a modest 3% year-on-year increase, the revenue from Xbox gaming services witnessed a remarkable 61% surge compared to the previous year. It is estimated that Activision Blizzard contributed to 55 points of revenue growth in terms of content and services.
Microsoft’s overall revenue increased by 18% year-on-year, reaching $62 billion, with an expected net income of $21.9 billion.
Looking ahead, Amy Hood, Microsoft’s Vice President and Chief Financial Officer, stated during an investor conference, “We expect low single-digit revenue growth in the gaming business, including approximately 45 points of net growth from the Activision acquisition […] We anticipate mid-to-high single-digit content and services growth for Xbox, driven by approximately 50 points of net growth from the Activision acquisition […] Hardware revenues will be down year-over-year.”
Satya Nadella, CEO of Microsoft, said, “This quarter, we achieved all-time records for monthly active users on Xbox, PC, and mobile devices, with over 200 million monthly active users, including Activision Blizzard games. Through our acquisition, we have added hundreds of millions of players to our ecosystem and are realizing our ambitions of reaching a larger player base across different platforms.”
He added, “We are expanding the realm of cloud gaming to offer players more ways to experience their favorite games whenever, wherever, and however they want. Streaming time has increased by 44% compared to the previous year.”
“Great content is key to our growth, and I have never been more excited about our upcoming game lineup.”
Unfortunately, these impressive results shared by Microsoft come shortly after a series of workforce reductions, which saw approximately 1,900 employees being laid off, a trend observed across various other companies. Just yesterday, Eidos announced that Embracer had let go around 100 employees and likely canceled another game from the Deus Ex series.
FAQ
The source of the article is from the blog mendozaextremo.com.ar