Microsoft’s acquisition of Activision Blizzard has not delivered the anticipated boost to Xbox game Pass or the company’s gaming divisions,according to a recent report by The Information. Despite high expectations, the $68.7 billion deal has yet to substantially increase Game Pass subscriptions or attract more studios to the platform.
Microsoft had hoped the acquisition would encourage more players to subscribe to Game Pass and persuade studios to launch their games on the service. However, neither goal has been achieved. Sources reveal that many studios have declined to join Game Pass, even with Microsoft offering substantial fees. Analysts suggest this reluctance stems from the fact that games can lose nearly 80% of their premium sales when launched on the platform, unless they are multiplatform titles.
Denny Fish, a portfolio manager overseeing Microsoft’s $800 million budget, described the activision Blizzard acquisition as a “disappointment.” this sentiment reflects broader concerns about Microsoft’s gaming strategy. The company aimed to reach 100 million Game Pass subscribers by 2030, but as of February 2024, the service has only 34 million subscribers. This figure includes players who transitioned from Xbox Live Gold to Xbox Game Pass Core. Notably,Microsoft has missed its growth targets for Game Pass over the past two years.
In response, Microsoft has increased Game Pass prices and introduced multiple subscription tiers with varying offerings. Thes changes, however, have not yet reversed the trend.
Another area where Microsoft fell short is its expectation that more studios would adopt its Azure Cloud servers for game development. Activision Blizzard continues to rely on Google Cloud, Amazon Web Services, and its own servers, bypassing Microsoft’s cloud infrastructure.
Despite these challenges, Microsoft’s gaming division has seen some successes. Titles like Starfield and Call of Duty: Modern Warfare 3 have performed well, but the company lacks a consistent pipeline of top-tier games. Several highly anticipated projects, including Fable, Perfect Dark, and Gears E-Day, remain in development.
| key Points | Details |
|—————-|————-|
| Game Pass Subscribers | 34 million (February 2024) |
| target by 2030 | 100 million |
| Studio Adoption | Many studios declined to join Game Pass |
| Cloud Services | Activision uses Google Cloud, AWS, and its own servers |
| First-Party Games | Limited output; major titles still in development |
The future of microsoft’s gaming strategy remains uncertain. While the Activision Blizzard acquisition was a bold move, its impact has been underwhelming so far. Can microsoft turn things around? Only time will tell.
