Activision Blizzard Acquisition Drove 61% Gaming Revenue Rise for Microsoft, Xbox Hardware Struggles

System · November 1

Activision Blizzard Acquisition Drove 61% Gaming Revenue Rise for Microsoft, Xbox Hardware Struggles | MMORPG.com

Microsoft's latest financial report shows that the Activision Blizzard acquisition drove strong gaming growth, despite struggling Xbox hardware numbers.

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Angrakhan · November 1

Huh and according to the posters on this site I thought the acquisition was a giant waste of money and everyone involved should be fired. Funny that. I guess that's why the people in charge of acquisitions at Microsoft are still in charge of acquisitions at Microsoft and the people posting armchair quarterback theories on the forums are still posting armchair theories on forums.

Terazon · November 2

Another funny thing is that so many people were against this acquisition but all it did was help keep Microsoft relevant in the gaming world as they are still in third place is the console sales department but have set themselves up for a nice software run.

FrodoFragins · November 2

It's really dependent on what was released during that time period. Games that were in development long before the purchase. D4 made a Billion so ...

emperorhades1 · November 2

Angrakhan said:

Huh and according to the posters on this site I thought the acquisition was a giant waste of money and everyone involved should be fired. Funny that. I guess that's why the people in charge of acquisitions at Microsoft are still in charge of acquisitions at Microsoft and the people posting armchair quarterback theories on the forums are still posting armchair theories on forums.

The acquisition was a giant waste of money and everyone involved should be fired.

First, these numbers are cooked.

"The reports covered three months ending September 30th and saw a 16% year over year overall revenue rise to $65.6 billion."

Yes, the revenue rose, Microsoft just bought a 75B dollar company. 16% over 3 months? ABK only makes 8 billion per year. I guess they must have reported all that profit in the last quarter or the more likely of events was Microsoft took the 7B in cash from the sale and called it revenue. Either way, 16% more revenue would have been Activisions full year earnings, not 3 months.

Microsoft CEO Satya Nadella said, “We set new records for monthly active users in the quarter as more players than ever play our games across devices and on the Xbox platform”

Um, you just bought 30M active users. This is like a no kidding statement.

He also notes that unit sales on PlayStation and Steam were +60% YoY, which “speaks to our strategy of meeting gamers where they are” with multiplatform releases, which was one of the things Microsoft promised amid the acquisition efforts.

Um, if the strategy was to just buy sales numbers and not take in account the impact of the dollars spent, sure Microsoft did great.

An investment firm would tear these numbers apart. Which the stock market did.

Microsoft’s better-than-expected earnings report wasn’t enough to prevent the stock’s steepest sell-off in two years, as investors instead focused on the company’s forecast for the current period.

Basically, they made this earnings report look good by cooking the books and now they have to find a way to get it all back before reporting year end results.

FrodoFragins said:

It's really dependent on what was released during that time period. Games that were in development long before the purchase. D4 made a Billion so ...

And this needs to quit being repeated. Diablo 4 did not make a billion dollars. They had revenue of a billion dollars. That means a billion in sales. The development costs ate this number and regurgitated it.

Terazon · November 2

emperorhades1 said:

FrodoFragins said:

It's really dependent on what was released during that time period. Games that were in development long before the purchase. D4 made a Billion so ...

And this needs to quit being repeated. Diablo 4 did not make a billion dollars. They had revenue of a billion dollars. That means a billion in sales. The development costs ate this number and regurgitated it.

It did make over a billion.
Diablo 4 has made $1 billion and counting for Blizzard, and a huge chunk of that comes from devilish microtransactions | Windows Central
He did not specify revenue over development costs.
How much do you think it costs to develop and market?
5 billion?
10 billion?
D4 was a massive hit and continues to rake in money.
Stop with the nonsense.

Scot · November 2

Terazon said:
It did make over a billion.
Diablo 4 has made $1 billion and counting for Blizzard, and a huge chunk of that comes from devilish microtransactions | Windows Central
He did not specify revenue over development costs.
How much do you think it costs to develop and market?
5 billion?
10 billion?
D4 was a massive hit and continues to rake in money.
Stop with the nonsense.

I think that's what he is saying, it made a billion but the cost of making the game would eat into that. I doubt those costs were so much that the revenue could not handsomely cover them. Also as long as players keep buying from the cash shop down the line I imagine they not short of revenue streams.

emperorhades1 · November 2

Scot said:

Terazon said:
It did make over a billion.
Diablo 4 has made $1 billion and counting for Blizzard, and a huge chunk of that comes from devilish microtransactions | Windows Central
He did not specify revenue over development costs.
How much do you think it costs to develop and market?
5 billion?
10 billion?
D4 was a massive hit and continues to rake in money.
Stop with the nonsense.

I think that's what he is saying, it made a billion but the cost of making the game would eat into that. I doubt those costs were so much that the revenue could not handsomely cover them. Also as long as players keep buying from the cash shop down the line I imagine they not short of revenue streams.

I am saying revenue (sales) was a billion. Development costs and marketing ate all the profit.

Terazon said:

emperorhades1 said:

FrodoFragins said:

It's really dependent on what was released during that time period. Games that were in development long before the purchase. D4 made a Billion so ...

And this needs to quit being repeated. Diablo 4 did not make a billion dollars. They had revenue of a billion dollars. That means a billion in sales. The development costs ate this number and regurgitated it.

It did make over a billion.
Diablo 4 has made $1 billion and counting for Blizzard, and a huge chunk of that comes from devilish microtransactions | Windows Central
He did not specify revenue over development costs.
How much do you think it costs to develop and market?
5 billion?
10 billion?
D4 was a massive hit and continues to rake in money.
Stop with the nonsense.

Well, the most expensive game was in less development time than Diablo 4 and only had one delay. It cost 700m. I am guessing d4 is a bit more than that since it had 2 delays, 3 different teams, now 4, and has been in development for 10 years with over 9000 people that have worked on it. So at best Diablo is slightly profitable. But they probably could have invested the development costs in the market and made more. 10 years is a long time to tie up money.

Terazon · November 2

emperorhades1 said:

Scot said:

Terazon said:
It did make over a billion.
Diablo 4 has made $1 billion and counting for Blizzard, and a huge chunk of that comes from devilish microtransactions | Windows Central
He did not specify revenue over development costs.
How much do you think it costs to develop and market?
5 billion?
10 billion?
D4 was a massive hit and continues to rake in money.
Stop with the nonsense.

I think that's what he is saying, it made a billion but the cost of making the game would eat into that. I doubt those costs were so much that the revenue could not handsomely cover them. Also as long as players keep buying from the cash shop down the line I imagine they not short of revenue streams.

I am saying revenue (sales) was a billion. Development costs and marketing ate all the profit.

Terazon said:

emperorhades1 said:

FrodoFragins said:

It's really dependent on what was released during that time period. Games that were in development long before the purchase. D4 made a Billion so ...

And this needs to quit being repeated. Diablo 4 did not make a billion dollars. They had revenue of a billion dollars. That means a billion in sales. The development costs ate this number and regurgitated it.

It did make over a billion.
Diablo 4 has made $1 billion and counting for Blizzard, and a huge chunk of that comes from devilish microtransactions | Windows Central
He did not specify revenue over development costs.
How much do you think it costs to develop and market?
5 billion?
10 billion?
D4 was a massive hit and continues to rake in money.
Stop with the nonsense.

Well, the most expensive game was in less development time than Diablo 4 and only had one delay. It cost 700m. I am guessing d4 is a bit more than that since it had 2 delays, 3 different teams, now 4, and has been in development for 10 years with over 9000 people that have worked on it. So at best Diablo is slightly profitable. But they probably could have invested the development costs in the market and made more. 10 years is a long time to tie up money.

Do you really think D4 cost $700 million to make? Really?
I don't believe that for one minute. I honestly do not think anyone else thinks that either.
Star Citizen Money? Come on. Be honest.

Slapshot1188 · November 2

So I didn’t look at the figures but I assume this is Microsoft reporting an increase in gaming revenue. Which is like saying ice is cold. They bought a huge gaming company. Now the real question is, how much, if at all… did the combined revenue go up? So MSFT + ACTV 2023 vs MSFT 2024?

As the stock tanked… I have my suspicions.

Terazon · November 2

Slapshot1188 said:

So I didn’t look at the figures but I assume this is Microsoft reporting an increase in gaming revenue. Which is like saying ice is cold. They bought a huge gaming company. Now the real question is, how much, if at all… did the combined revenue go up? So MSFT + ACTV 2023 vs MSFT 2024?

As the stock tanked… I have my suspicions.

I must be missing something. The stock tanked?
Am I looking at the wrong thing here?

Microsoft, posted revenues of $65.59 billion for the quarter ended September 2024, surpassing the Consensus Estimate by 1.82%. This compares to year-ago revenues of $56.52 billion. The company has topped consensus revenue estimates four times over the last four quarters.

Slapshot1188 · November 2

Terazon said:

Slapshot1188 said:

So I didn’t look at the figures but I assume this is Microsoft reporting an increase in gaming revenue. Which is like saying ice is cold. They bought a huge gaming company. Now the real question is, how much, if at all… did the combined revenue go up? So MSFT + ACTV 2023 vs MSFT 2024?

As the stock tanked… I have my suspicions.

I must be missing something. The stock tanked?
Am I looking at the wrong thing here?

Microsoft, posted revenues of $65.59 billion for the quarter ended September 2024, surpassing the Consensus Estimate by 1.82%. This compares to year-ago revenues of $56.52 billion. The company has topped consensus revenue estimates four times over the last four quarters.

I haven't dug into it, but that dip is a few days ago when they announced their earnings.

Elidien_ga · November 2

The confirmation biases are strong in this thread. Diablo 4 is successful, Microsoft's acquisition is successful. Why? because they would not otherwise make it known and be like other companies and release as little info as possible. And for me personally, so far for every game I play that they have recently acquired, I am happy they did. I have seen lots of positives in games that have been stagnant for months.

Terazon · November 2

Slapshot1188 said:

Terazon said:

Slapshot1188 said:

So I didn’t look at the figures but I assume this is Microsoft reporting an increase in gaming revenue. Which is like saying ice is cold. They bought a huge gaming company. Now the real question is, how much, if at all… did the combined revenue go up? So MSFT + ACTV 2023 vs MSFT 2024?

As the stock tanked… I have my suspicions.

I must be missing something. The stock tanked?
Am I looking at the wrong thing here?

Microsoft, posted revenues of $65.59 billion for the quarter ended September 2024, surpassing the Consensus Estimate by 1.82%. This compares to year-ago revenues of $56.52 billion. The company has topped consensus revenue estimates four times over the last four quarters.

I haven't dug into it, but that dip is a few days ago when they announced their earnings.

I see.

Not sure that is a story though.
Apple also dropped this week. So did IBM. So did Oracle.
Year over year and quarter over quarter is what matters.

Stocks are always weird during election cycles in America

ValdemarJ · November 2

Slapshot1188 said:

Terazon said:

Slapshot1188 said:

So I didn’t look at the figures but I assume this is Microsoft reporting an increase in gaming revenue. Which is like saying ice is cold. They bought a huge gaming company. Now the real question is, how much, if at all… did the combined revenue go up? So MSFT + ACTV 2023 vs MSFT 2024?

As the stock tanked… I have my suspicions.

I must be missing something. The stock tanked?
Am I looking at the wrong thing here?

Microsoft, posted revenues of $65.59 billion for the quarter ended September 2024, surpassing the Consensus Estimate by 1.82%. This compares to year-ago revenues of $56.52 billion. The company has topped consensus revenue estimates four times over the last four quarters.

I haven't dug into it, but that dip is a few days ago when they announced their earnings.

The stock dipped, according to financial analysts, because investors aren't as confident in the long term revenue returns from AI, the costs of development, and the massive infrastructure costs (electricity and data centers) for growing the IP. It had nothing to do with gaming.

Stock market today: Microsoft, Meta drag tech stocks lower on concerns over AI spending

Slapshot1188 · November 2

ValdemarJ said:

Slapshot1188 said:

Terazon said:

Slapshot1188 said:

So I didn’t look at the figures but I assume this is Microsoft reporting an increase in gaming revenue. Which is like saying ice is cold. They bought a huge gaming company. Now the real question is, how much, if at all… did the combined revenue go up? So MSFT + ACTV 2023 vs MSFT 2024?

As the stock tanked… I have my suspicions.

I must be missing something. The stock tanked?
Am I looking at the wrong thing here?

Microsoft, posted revenues of $65.59 billion for the quarter ended September 2024, surpassing the Consensus Estimate by 1.82%. This compares to year-ago revenues of $56.52 billion. The company has topped consensus revenue estimates four times over the last four quarters.

I haven't dug into it, but that dip is a few days ago when they announced their earnings.

The stock dipped, according to financial analysts, because investors aren't as confident in the long term revenue returns from AI, the costs of development, and the massive infrastructure costs (electricity and data centers) for growing the IP. It had nothing to do with gaming.

Stock market today: Microsoft, Meta drag tech stocks lower on concerns over AI spending

Here is a good chart. XBOX and Gaming is the bottom line. Yeah they are up 61% Q1 vs Q1, Same as Q4, Q3, Q2. It's all just an increase because the baseline grew via acquisition. Now lets see what happens in Q2 because Q2 2024 is when they started including the Activision earnings.

FrodoFragins · November 2

emperorhades1 said:

Angrakhan said:

Huh and according to the posters on this site I thought the acquisition was a giant waste of money and everyone involved should be fired. Funny that. I guess that's why the people in charge of acquisitions at Microsoft are still in charge of acquisitions at Microsoft and the people posting armchair quarterback theories on the forums are still posting armchair theories on forums.

The acquisition was a giant waste of money and everyone involved should be fired.

First, these numbers are cooked.

"The reports covered three months ending September 30th and saw a 16% year over year overall revenue rise to $65.6 billion."

Yes, the revenue rose, Microsoft just bought a 75B dollar company. 16% over 3 months? ABK only makes 8 billion per year. I guess they must have reported all that profit in the last quarter or the more likely of events was Microsoft took the 7B in cash from the sale and called it revenue. Either way, 16% more revenue would have been Activisions full year earnings, not 3 months.

Microsoft CEO Satya Nadella said, “We set new records for monthly active users in the quarter as more players than ever play our games across devices and on the Xbox platform”

Um, you just bought 30M active users. This is like a no kidding statement.

He also notes that unit sales on PlayStation and Steam were +60% YoY, which “speaks to our strategy of meeting gamers where they are” with multiplatform releases, which was one of the things Microsoft promised amid the acquisition efforts.

Um, if the strategy was to just buy sales numbers and not take in account the impact of the dollars spent, sure Microsoft did great.

An investment firm would tear these numbers apart. Which the stock market did.

Microsoft’s better-than-expected earnings report wasn’t enough to prevent the stock’s steepest sell-off in two years, as investors instead focused on the company’s forecast for the current period.

Basically, they made this earnings report look good by cooking the books and now they have to find a way to get it all back before reporting year end results.

FrodoFragins said:

It's really dependent on what was released during that time period. Games that were in development long before the purchase. D4 made a Billion so ...

And this needs to quit being repeated. Diablo 4 did not make a billion dollars. They had revenue of a billion dollars. That means a billion in sales. The development costs ate this number and regurgitated it.

In my mind "make" means "gross". The grossed a billion dollars. The article is about income, regardless of who paid the development costs.

Just pointing out the article shows correlation not causation.

emperorhades1 · November 2

Terazon said:

emperorhades1 said:

Scot said:

Terazon said:

It did make over a billion.
Diablo 4 has made $1 billion and counting for Blizzard, and a huge chunk of that comes from devilish microtransactions | Windows Central
He did not specify revenue over development costs.
How much do you think it costs to develop and market?
5 billion?
10 billion?
D4 was a massive hit and continues to rake in money.
Stop with the nonsense.

I think that's what he is saying, it made a billion but the cost of making the game would eat into that. I doubt those costs were so much that the revenue could not handsomely cover them. Also as long as players keep buying from the cash shop down the line I imagine they not short of revenue streams.

I am saying revenue (sales) was a billion. Development costs and marketing ate all the profit.

Terazon said:

emperorhades1 said:

FrodoFragins said:

It's really dependent on what was released during that time period. Games that were in development long before the purchase. D4 made a Billion so ...

And this needs to quit being repeated. Diablo 4 did not make a billion dollars. They had revenue of a billion dollars. That means a billion in sales. The development costs ate this number and regurgitated it.

It did make over a billion.
Diablo 4 has made $1 billion and counting for Blizzard, and a huge chunk of that comes from devilish microtransactions | Windows Central
He did not specify revenue over development costs.
How much do you think it costs to develop and market?
5 billion?
10 billion?
D4 was a massive hit and continues to rake in money.
Stop with the nonsense.

Well, the most expensive game was in less development time than Diablo 4 and only had one delay. It cost 700m. I am guessing d4 is a bit more than that since it had 2 delays, 3 different teams, now 4, and has been in development for 10 years with over 9000 people that have worked on it. So at best Diablo is slightly profitable. But they probably could have invested the development costs in the market and made more. 10 years is a long time to tie up money.

Do you really think D4 cost $700 million to make? Really?
I don't believe that for one minute. I honestly do not think anyone else thinks that either.
Star Citizen Money? Come on. Be honest.

No, I do not think it cost 700M to make and market. I think it was more.

Scot · November 3

I find $700M hard to believe but I don't think it is impossible when you factor in all the changes along the way. If you "restart" enough times times the cost of a project can double or treble.

Neoyoshi · November 3

Microsoft just sucks.

Xiaoki · November 3

emperorhades1 said:

Terazon said:

emperorhades1 said:

Scot said:

Terazon said:

It did make over a billion.
Diablo 4 has made $1 billion and counting for Blizzard, and a huge chunk of that comes from devilish microtransactions | Windows Central
He did not specify revenue over development costs.
How much do you think it costs to develop and market?
5 billion?
10 billion?
D4 was a massive hit and continues to rake in money.
Stop with the nonsense.

I think that's what he is saying, it made a billion but the cost of making the game would eat into that. I doubt those costs were so much that the revenue could not handsomely cover them. Also as long as players keep buying from the cash shop down the line I imagine they not short of revenue streams.

I am saying revenue (sales) was a billion. Development costs and marketing ate all the profit.

Terazon said:

emperorhades1 said:

FrodoFragins said:

It's really dependent on what was released during that time period. Games that were in development long before the purchase. D4 made a Billion so ...

And this needs to quit being repeated. Diablo 4 did not make a billion dollars. They had revenue of a billion dollars. That means a billion in sales. The development costs ate this number and regurgitated it.

It did make over a billion.
Diablo 4 has made $1 billion and counting for Blizzard, and a huge chunk of that comes from devilish microtransactions | Windows Central
He did not specify revenue over development costs.
How much do you think it costs to develop and market?
5 billion?
10 billion?
D4 was a massive hit and continues to rake in money.
Stop with the nonsense.

Well, the most expensive game was in less development time than Diablo 4 and only had one delay. It cost 700m. I am guessing d4 is a bit more than that since it had 2 delays, 3 different teams, now 4, and has been in development for 10 years with over 9000 people that have worked on it. So at best Diablo is slightly profitable. But they probably could have invested the development costs in the market and made more. 10 years is a long time to tie up money.

Do you really think D4 cost $700 million to make? Really?
I don't believe that for one minute. I honestly do not think anyone else thinks that either.
Star Citizen Money? Come on. Be honest.

No, I do not think it cost 700M to make and market. I think it was more.

Your insane ramblings are getting more unhinged.

This extreme hatred for Diablo 4 and all things Blizzard is unhealthy.

Gorwe · November 3

Angrakhan said:

Huh and according to the posters on this site I thought the acquisition was a giant waste of money and everyone involved should be fired. Funny that. I guess that's why the people in charge of acquisitions at Microsoft are still in charge of acquisitions at Microsoft and the people posting armchair quarterback theories on the forums are still posting armchair theories on forums.

That's why I keep saying that my (dis)likes (ultimately) don't matter. I might (dis)like a game, but reality is reality and Micro$oft surely wouldn't waste 69 BILLION Dollars.

This was a smart purchase. Even if I ultimately don't care about products involved.

As for Bobby and other COs? Yeah, they are often scum of the earth, but it's their job. And Bobby(can't believe I am defending him) is / was a bloody GOOD manager.

Shaigh · November 3

If you compare apples and oranges with just apples you will have more. Purchased revenue doesn't mean a thing, its the bottom lines that matter.

Actiblizzard was a strategic acquisition for the future, if you only look at todays numbers it was a gigantic waste of money. Microsoft haven't had enough time to do much of anything with actiblizzard so far, its stuff that was already in the pipeline when they purchased the company.

If microsoft can't grow the gaming revenue quicker than gaming costs its a bad purchase regardless of how much their revenue grows.

emperorhades1 · November 3

Shaigh said:

If you compare apples and oranges with just apples you will have more. Purchased revenue doesn't mean a thing, its the bottom lines that matter.

Actiblizzard was a strategic acquisition for the future, if you only look at todays numbers it was a gigantic waste of money. Microsoft haven't had enough time to do much of anything with actiblizzard so far, its stuff that was already in the pipeline when they purchased the company.

If microsoft can't grow the gaming revenue quicker than gaming costs its a bad purchase regardless of how much their revenue grows.

I hope they show end of year for the gaming business. I want to see what 75B bought them. Because, from what I see, WoW is still bleeding, Diablo 4 is vulnerable, CoD is actually doing good, the mobile business is good and XBOX is still not finding a way to attract buyers.

The acquisition, allowed by the current administration, has yielded layoffs and firing, but no real value to gamers, which was a stipulation.

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Activision Blizzard Acquisition Drove 61% Gaming Revenue Rise for Microsoft, Xbox Hardware Struggles

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Activision Blizzard Acquisition Drove 61% Gaming Revenue Rise for Microsoft, Xbox Hardware Struggles

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