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[LectureMaster]

Activision Purchase Hasn't Helped Xbox Game Pass, Report Claims

According to a new report, Microsoft's purchase of Activision hasn't helped Xbox Game Pass growth or the gaming division in general.

insider-gaming.com

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Microsoft’s purchase of Activision Blizzard hasn’t helped it grow Xbox Game Pass or the gaming business in general. According to a new report from The Information, the growth from the acquisition has yet to hit what Microsoft was hoping for when it made the $69 billion purchase.

The Information claims that Microsoft was hoping that the purchase would help convince more players to sign up to the service as well as push more studios to releasing their games on the subscription-based platform. Instead, their sources say say that “several leading game studios have resisted Microsoft’s pitch that they should put their titles on Game Pass in exchange for fees that Microsoft offers to pay to the gaming studios.”

Denny Fish, a portfolio manager who oversees funds including a reported $800 million of Microsoft stock, told the outlet, “[Activision] has been disappointing.”

Microsoft had targeted reaching 100 million subscribers by 2030. As of February 2024, there were 34 million subscribers, including those who became subscribers after Microsoft converted Xbox Live to Xbox Game Pass Core. Microsoft has failed to hit Game Pass growth targets in each of the last two years. That led to Game Pass’s growth being dropped as a metric that determined CEO Satya Nadella’s pay at Microsoft.

Meanwhile, the company raised its prices while introducing a new tier—Game Pass Standard—that took away Day One releases from console subscribers unless they upgrade to Game Pass Ultimate.

In addition, Microsoft expected more studios and publishers to rent Azure cloud servers for their games. It’s said that Activision is still using Google Cloud and Amazon Web Services for its server rentals along with “primarily relying on its own servers for development”.

Insider Gaming has reached out to Microsoft regarding the report. Should a response of any kind be received, it will be added to this story. Microsoft is scheduled to announce its Q2 earnings for FY2025 on January 29.

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[LectureMaster]

adamsapple

 

[adamsapple]

According to a new report from The Information

 

[Jaybe]

Game Pass peaked at 34 million in Feb 2024, all because they decided to classify Live as Game Pass. Not even CoD got them to a new peak subscription count.

 

[Flabagast]

Failing strategy

 

[AJUMP23]

I am happy with the meager deal I get with it.

 

[MayauMiao]

Microsoft been taking lots of L's lately.

 

[Kacho]

Microsoft is scheduled to announce its Q2 earnings for FY2025 on January 29.

 

[Danny Dudekisser]

I refuse to believe that Microsoft was incompetent enough to believe that this would just catapult GamePass to the heavens. It should've been clear years prior to the deal's completion that fueling it through pure acquisitions hadn't worked and wouldn't work in the future... sure as shit not to the level where this kind of expenditure made sense.

 

[Crayon]

Friendly reminder that Phil has the mind of a child.

 

[MayauMiao]

Spent billions purchasing Activision, only to have their games lately getting beaten by the likes of Path of Exile (Diablo), Marvel Rivals (Overwatch), Fortnite (CoD).

 

[Luc2010]

If they kept everything exclusive from Activision on Xbox. They might get more sales. As it stands, you don't need an Xbox to play Xbox owned games.

 

[Deerock71]

They need to unleash ALL the CoDs onto that bitch!

 

[Insanemaelstrom]

For me the biggest thing is, Xbox has to many studios on its hand. Managing all that is a management suicide, especially when Xbox management wasn't able to handle the handful of studios they had before the spending spree. I dread the amount of studios that are going to be closed in the future

 

[DownLikeBCPowder]

If they kept everything exclusive from Activision on Xbox. They might get more sales. As it stands, you don't need an Xbox to play Xbox owned games.

Yeah this is... this is where I'm at from an observation stand point. None of it makes sense. Conflicting goals, I can't see it any other way.

 

[TheThreadsThatBindUs]

If they kept everything exclusive from Activision on Xbox. They might get more sales. As it stands, you don't need an Xbox to play Xbox owned games.

How would they get more sales by selling on less platforms?

Xbox sells like shit.

And everybody who already owned an Xbox was already loaded up on like 50yrs of the GamePass $1 promotion. So not only would that net them no additional subs growth, it would tank the profitability of Activision and their games.

GamePass is a terrible service for AAA games, and MS thinking they could lure away PS owners by strong-arming them through acquiring all the existing third party content and forcing it exclusive was a pipedream.

Not only did it backfire horrendously, now PS owners have it better than ever before, because MS is forced to continue supporting PS with Activision games and also is forced to put their first party MGS games on PS and Switch in order to keep their gaming business afloat.

Spencer is fucking clueless and made the most prolific own-goal with the Xbox business in history.... worse than anything his predecessor did.

 

[ChorizoPicozo]

Xbox fanbase:

 

[Three]

Does Denny Fish have a good track record? I have my doubts about this report. I think this may be more to calm the Jan 29 report when it's not as bad as he is claiming regarding subs. Subs would likely see an increase. Gamepass has had a late 2024 price increase of 25% and a CoD boost. I just don't see how it could perform badly. In the overall picture of making their acquisitions worthwhile I'm not sure but it would certainly see a boost.

 

[MayauMiao]

If they kept everything exclusive from Activision on Xbox. They might get more sales. As it stands, you don't need an Xbox to play Xbox owned games.

Maybe years ago when Overwatch, CoD, and Diablo were at the top but if they attempt to do this now, gamers will simply leave because they have better options.

 

[damidu]

I refuse to believe that Microsoft was incompetent enough to believe that this would just catapult GamePass to the heavens. It should've been clear years prior to the deal's completion that fueling it through pure acquisitions hadn't worked and wouldn't work in the future... sure as shit not to the level where this kind of expenditure made sense.

lol they were incompetent enough to believe they can win console wars and get to netflix of gaming subscription numbers at the start of gen.
we read phil's emails you know.
the moron was even daydreaming about buying nintendo with daddy's credit card ffs

 

[Nitty_Grimes]

If they kept everything exclusive from Activision on Xbox. They might get more sales. As it stands, you don't need an Xbox to play Xbox owned games.

But nobody buys games on Xbox because of Game Pass. So how would they get more sales?

This is why they’ve had to dump content onto other consoles to try and get some sales.

 

[sendit]

This should be awesome future case study for students learning about running a successful business on what not to do.

 

[onQ123]

This is the exact same information from the last thread

 

[Rocinante618]

I simply don't care lol if it's profitable or not to MS.

Indy, Age of Mythology Remake, Stalker & CoD campaigns for a fraction of the price I would have paid if I had bought a perpetual license was a really good deal for me and in the future I hope MS keeps bleeding money to put high quality AAA ~$70 priced titles day 1 on gamepass.

 

[Burger King]

Prediction for January 30:

Phil is fired

 

[Cyberpunkd]

Don’t worry, Phil will probably get promoted. Nadella ok’ed the strategy, he will not admit he was wrong.

 

[Felessan]

I simply don't care lol if it's profitable or not to MS.

Indy, Age of Mythology Remake, Stalker & CoD campaigns for a fraction of the price I would have paid if I had bought a perpetual license was a really good deal for me and in the future I hope MS keeps bleeding money to put high quality AAA ~$70 priced titles day 1 on gamepass.

You should probably start train yourself to like Fortnite and other f2p games in preparation when current situation implode

 

[havoc00]

Slander if you ask me

 

[Cyberpunkd]

I refuse to believe that Microsoft was incompetent enough to believe that this would just catapult GamePass to the heavens. It should've been clear years prior to the deal's completion that fueling it through pure acquisitions hadn't worked and wouldn't work in the future... sure as shit not to the level where this kind of expenditure made sense.

Corporate history has untold examples of hubris and sheer incompetency that combine to create clusterfucks.

 

[Setsuna Mudou]

Does Denny Fish have a good track record? I have my doubts about this report. I think this may be more to calm the Jan 29 report when it's not as bad as he is claiming regarding subs. Subs would likely see an increase. Gamepass has had a late 2024 price increase of 25% and a CoD boost. I just don't see how it could perform badly. In the overall picture of making their acquisitions worthwhile I'm not sure but it would certainly see a boost.

Makes plenty of sense that the price increase has led to an actual decrease in subscribers. Even if the money made was offset by the increase, seeing a trend line going down in subscribers could be the writing on the wall, especially when the game sales lost have to be factored in as well. The kind of people that get COD for the story don't need to pay $70 when they can just get the gp for 1 month and be done with it.

 

[Burger King]

I am convinced that Satya Nadella has now convinced himself to sell the Xbox brand to someone (Tencent?).

However, Microsoft could keep a gaming division with its most representative PC and strategic mobile games: Flight Simulator, Age of, Minecraft, King's mobile games, etc.

 

[Auto_aim1]

If you want to help the Xbox brand, make (good) exclusives for Series X and stfu for a few years.

 

[YeulEmeralda]

Makes me sad kids only know Activision from Call of duty.

 

[Sanepar]

Great news. Hope MS ends this service soon as possible.

 

[ChuckeRearmed]

They basically hit the limit with GP on consoles in their market. That's all to it. On PC ABK games have people in Battle net and Steam.

 

[Ramiro_Rodriguez]

Friendly reminder that Phil has the mind of a child.

But the body of a bear!

That led to Game Pass’s growth being dropped as a metric that determined CEO Satya Nadella’s pay at Microsoft.

Dickmove..
When you "suck" as a CEO can you still change the rules, because you're greedy and want more money..

 

[ProtoByte]

No shit.
All they achieved was:

• Taking on the managerial weight of a whole other publisher
• Massively reducing sales revenue by slapping high selling titles onto gamepass

 

[Fake]

Imagine wasting that money.

 

[IDKFA]

Friendly reminder that Phil has the mind of a child.

I'd have to agree. This is the same guy who thought he could spearhead a deal for Microsoft to buy Nintendo.

“getting Nintendo would be a career moment and I honestly believe a good move for both companies.”

LOL.

 

[deriks]

People expect that buying a company would change the whole thing in just a year?

Bitch, please

 

[Ozriel]

If they kept everything exclusive from Activision on Xbox. They might get more sales. As it stands, you don't need an Xbox to play Xbox owned games.

More hardware sales, likely

Dramatically lower revenue from COD? For sure.

That was never going to happen.

 

[Sanepar]

For me the biggest thing is, Xbox has to many studios on its hand. Managing all that is a management suicide, especially when Xbox management wasn't able to handle the handful of studios they had before the spending spree. I dread the amount of studios that are going to be closed in the future

I hope they sell cheap to someon.

Besides Compulsion no one deserves to be closed.

 

[Kikorin]

MS soon or later will find a way to make CoD fail as a series, even if seems an impossible task to archive.

 

[Elios83]

The Activision acquisition served just to the purpose of increasing revenues and turning Microsoft into a multiplatform publisher.
For the Xbox brand it was pure poison, the opposite outcome of what their fans expected/wanted.

 

[clarky]

Besides Compulsion no one deserves to be closed.

Dunno Turn10 are making a pretty good case with that latest forza fart.

No tears for Ninja theory either after they spent over 5 years making a game worse than its predessor.

 

[Tiago Rodrigues]

I don't care much about Xbox but there seems to be no new information there? And it shows no new numbers specially after the new COD debuted or is it just me?

 

[Moridianae]

You mean Microsoft's usual strategy of trying to force things by buying their way to success didn't bear fruit?

Womp womp.

 

[Hollowpoint5557]

Why would it grow Gamepass when there are hundreds of Activision games that they own that they still haven't put on Gamepass? The few new titles they put on Gamepass do not interest me.

 

[Horseganador]

The whole situation is hilarious, even more so if you start reading the euphoric reactions when ABK was bought, which was the end of PS, in the end they spent more than 70 billion, hundreds of millions on the development of COD and marketing so that console sales continue to fall, the GP stagnates and they have to take the Sega route in order to maintain the business, predictable.

 

[Pedro Motta]

It hurt more Activision than Gamepass.

But who knew right??