The acquisition of Activision Blizzard by Microsoft hasn’t significantly expanded Xbox Game Pass or its overall gaming business as anticipated. A recent report by The Information indicates that the expected growth from this $69 billion deal has yet to materialize, according to Microsoft’s initial expectations at the time of purchase.
According to the report, Microsoft anticipated that the acquisition would persuade more gamers to subscribe and encourage more game developers to publish their games on a subscription-based service. However, it appears that several prominent game studios have been hesitant about Microsoft’s proposal to list their titles on Game Pass for the compensation fees offered by Microsoft.
Denny Fish, a portfolio manager responsible for overseeing funds worth approximately $800 million in Microsoft shares, expressed his dissatisfaction to the media outlet, stating, “Activision’s performance has fallen short.
By 2030, Microsoft aimed to achieve a subscriber base of 100 million. However, by February 2024, the number of subscribers had only reached 34 million. This count includes those who joined after Xbox Live was transformed into Xbox Game Pass Core. For two consecutive years, the growth of Game Pass has fallen short of its targets. Consequently, the progress of Game Pass no longer serves as a key factor in determining CEO Satya Nadella’s compensation at Microsoft.
Simultaneously, the company increased its rates and rolled out a fresh tier called Game Pass Standard. This new tier, however, removed Day One releases for console subscribers, unless they opted to upgrade to Game Pass Ultimate instead.
Furthermore, Microsoft anticipated that more game developers would opt for Azure cloud servers for their projects. However, it’s been reported that Activision continues to utilize Google Cloud and Amazon Web Services for server rental, while primarily developing on their own servers.
topMob contacted Microsoft about the recent report. If we receive a reply, it will be included in this update. Microsoft is set to disclose its Q2 earnings for fiscal year 2025 on January 29.
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2025-01-15 22:47