Activision Blizzard Continues To Drive Massive Uptick In Revenue For Xbox

Nice try at spinning it but that is a disastrous set of figures for Xbox. Hard to see anything other than an expansion to the program of releasing on other platforms because nothing else (Game Pass, console sales) is growing whatsoever.

@Ooccoo_Jr The negative stuff is coming, I had to try a little pick-me-up first 😅

And now we can see the reason for the price increase in subscription fees.

Clearly the current strategy of play anywhere isn’t resonating with gamers. And as we have known for a while subscription is stagnating (ps included too and I expect them to follow with a price rise).

But stagnation isn’t the end of the world, it’s just Microsoft have to realise that gaming doesn’t work like they other sectors they are in.

As an existing Xbox consumer these figures mean absolutely zip to me personally.

I will continue to enjoy Xbox and use their service while I think they offer value / fun, which for now they do for me personally.

When that ratio changes then I will look at my options then. Until that point I will just enjoy the console & games.

I’m curious to see how the next FY goes. Right now they’re getting an artificial bump from ABK, which without is a bleak picture. 😕

@Kezelpaso To be fair I mean disastrous for Microsoft more than us gamers. I am still excited by what games Xbox have coming but I cannot see anything other than a future as a multiformat Publisher. In fact I actively hope for that now as the alternative is more layoffs and studio closures.

I wonder what the number is for mw3 players on gamepass.

@Ooccoo_Jr Yeah... we've been back and forth here at the offices on this and I keep saying that I can't see another Xbox console after next-gen. It feels like they maybe have one more in them before it becomes a pointless endeavour - unless their strategy changes again.

@BacklogBrad numbers don’t matter if the already subscribed are playing it.

It’s if it attracted new members, or if the current subscribers are paying for micro transactions.

What is telling is that 500m across ALL Platforms/devices. Xbox Consoles, particularly Series S/X looking forward (as XB1 is getting fewer releases) obviously can't 'reach' 500m Gamers so double down on 'reach' as the vast majority your 'Monthly Active Users' are not on their own Consoles anyway....

From my perspective, Series X is still my prefered way to play Xbox games. I do sometimes stream but often just to try something I'm not sure I'll play enough to warrant downloading first. II do have a RoG Ally and Gaming Laptop too so could choose not to buy or play on Xbox Console but still be an 'Xbox' Customer...

With CoD making Millions per day - not just in sales of the latest game, but sales of Season Passes, Cosmetic Bundles, CoD points etc - and that includes to users of 'F2P' games like CoD Mobile and Warzone too. All those who will 'play' via Game Pass too, many of whom will spend money on those 'extras', jump in to Events etc.

I think MS will make at least another Console as it still offers consumers something no other options do for the 'Price'.Streaming isn't as good and PC's can be too complicated or expensive for everyone so a Console is the 'perfect' option for some. Not everyone wants to buy or game on PC and Streaming isn't good enough for them either.

But they are chasing MAU's and their Console alone would never reach 500m - not even Playstation or Switch can reach those figures. Sell to 50-100m where maybe 5-10% at most buy any game, or get 30m+ in your game across various devices and selling 5-10x more Season Passes, MTX's etc, you make 'more' money...

The way subscription services work is you keep the price low to get people in and then you raise prices.

Ok now hear me out.

If you acknowledge that this generation was going to be hard to win because people grew their digital libraries from the last generation.

If you acknowledge that PlayStation user base is significantly higher than yours.

Then when you bought activision these are the theoretical new subscribers.

Microsoft needed to heavily discount their subs and consoles to get these PlayStation owners to say that’s such a great deal I have to jump on it.

Instead Microsoft says we will release our games on PlayStation and we will raise the price of game pass.

So why again if I was a PlayStation fan would I buy an Xbox?

I just don’t understand what was the purpose of wasting a whole year or two in court. Xbox fans basically waited for this to wrap up. Just to be greeted with two subscription raises. If you couldn’t take a loss to lure over PlayStation fans when you could see the play anywhere tactics were doing nothing then you shouldn’t have spent 69 billion dollars buying something.

I guess the one thing they could do when the next generation starts from the get go advertise that these games will be from now on exclusive to Xbox. So think about that when making your next generation purchase.

@BAMozzy you say all that.

Then the figures say different. Barely any growth.

Doesn’t matter if 30m play CoD on gamepass. Or if 15million play XYZ for whatever hours.

It only matters if those players are spending on MTX or new users.

Existing users who don’t spend are adding nothing extra (besides price rise increases)

I have a feeling that at the launch of the next console, it won’t be Xbox branded, I think it will go to something along the lines of Microsoft gaming. Do a soft reset, start advertising etc.

@PsBoxSwitchOwner To me, that's very little different to a Gamer that only buys used or heavily discounted hardware/games - maybe doesn't even have Game Pass Core/PS+ Essential. That user isn't 'contributing' to growth and may have 'lost' the Platform holder money getting them in to that ecosystem that won't be recuperated for years (if ever).

There will be some that may only Sub to Game Pass for 1-2m a year, play everything they want for $20 or so, then quit. They'll not contribute to growth either but they are like those Console owners that only buy used or heavily discounted releases, maybe didn't even buy their Hardware new.

The difference though is that if you only ever Sell 5-10m copies of a Game, the most 'additional' content you can sell is 5-10m. You get 30m playing, you can sell 3-6x more. If only 25% buy Season Passes, that's upto 2.5m vs 7.5m - all through 'your' store. If they lose 5m sales on PS5 as they choose to play on Xbox, that's 5m more in their Store front where 100% of revenue goes to Microsoft compared to just 70% from Sony (as Sony take 30%) - effectively getting 'more' per player per 'purchase'.

Of course its all about getting people to 'spend' money - not just on Subs, but you also need to get them into the 'storefront' before you can sell them ANYTHING. No-one will buy Season Passes, MTX's etc if they aren't playing the game and MANY games these days have their own storefront too.

CoD doesn't sell as well on Xbox, so MS wasn't making anywhere near the same money as Playstation - now they'll get 70% from all those who buy on Playstation, 100% from all those that buy on Xbox and their PC store, as well as those that 'buy' any content through accessing on Game Pass. instead of maybe selling just 2-3m season passes, they could sell more now as Steam/Battlenet users as well as some Playstation users 'choose' to switch to Game Pass thus making 'more' overall for MS instead of some of that money going to Valve and Sony...

"The real goal here is to take a broad set of content to more users in more places, and build something that looks more like, to us, a software annuity and subscription business with enhanced transactions and the ownership of IP which is quite valuable long-term,"

And this, my friends, is the future of Xbox - straight from Amy Hood's mouth.

I'm not surprised, though. The writing has been on the wall. It's just "nice" to finally get "confirmation" from an executive.

Microsoft will still make consoles, but its console focus will be more like something akin to the Surface line of products.

I am already making moves for getting out of the "premium console market" and building a nice mid-range PC so I can get all the games (minus Nintendo - I'll still buy Nintendo consoles unless it, too, goes PC release route) in one place.

Sony's dominance will only continue to strengthen its ambition to bend its customers over a barrel with price hikes and remasters (and be defended for it because...Sony).

Microsoft clearly isn't focused on the hardware anymore.

Throw in the fact that the idea of a subsidized console might be coming to an end, I am just better off getting a good PC at the cost of convenience.

It's really the financial year of 24/25 that counts. That way the 'bounce' given to the figures for 23/24 will be ironed out, and it will be possible to see a proper comparison of year on year. The numbers just released, whilst impressive in their own right, are masking what is really happening for Xbox right now. There won't be anywhere to hide for Xbox next year as the figures will be easily understood by everyone.

We just have to hope that Microsoft are able to knock it out of the park during the course of the next few months, and that way settle some of the jitters that we Xbox gamers are feeling...

These are huge sums of money that Nintendo or Sony would like to see.

The bad thing is that it seems that consoles no longer have any relevance, the results are brutal without hardly selling hardware.

I think that this phenomenon of being successful without needing the console is something that we are going to see in all companies over time, but Microsoft is very far ahead, perhaps too far ahead.

@WhiteRabbit Kind of sounds like how Sony got started.

@Mustoe The only thing preventing me from pulling the trigger is that we are kind of reaching a transition point for PC hardware.

I priced out a DIY AMD 7800X3D, Nvidia 4070 Super, 32GB RAM, and a 2TB Samsung 990 Pro. With monitor, keyboard, case, liquid CPU cooler, cables, surge protector, etc., I have it priced under $2K.

Buuut, AMD's new CPUs are set to be released, and I want to see how they compare to the 7800X3D. Plus...I want to see if Nvidia's 50 series GPUs are close to release (Sept/Oct??).

I'd rather start with the "latest and greatest" CPU/GPU architecture right out of the gate if it makes sense to do so.

@PsBoxSwitchOwner The problem is that when big corporations realize that one sector will never perform as the other ones their answer is to just get rid of the entire sector altogether, like MS already did with Windows Phone.

I refused to believe that Microsoft would get rid of Xbox is it wasn’t allowed to buy Activision-Blizzard, now I’m 100% certain it was true.

@PsBoxSwitchOwner I disagree, current subs playing it does matter. If it is increasing engagement from current subs, it is less likely they unsub. If a substantial amount of people are in the game that weren't before ganepass then it is more people with access to in game purchases. Data shows that free to play or subscription service games are more likely to make microtransactions because they dont feel that they have paid anything for the game and are willing to throw a few bucks at it if they are enjoying it.

Every match I play seems to have 3-5 people that are similar level as me so I am assuming that a fair number of gamepass players are playing it for the first time like me.

@Mustoe Not for me. I have a great £4k PC, but never play games on it. Cant stand it as a platform.
I'm not saying that's going to be everyone's experience, but gaming for me is sitting in front of my TV on the Sofa, switching on the console and playing within a minute or two. That never happens on a PC no matter how much you try and streamline it. You always have a driver to update, you need to access several store fronts, I often have incompatibility issues (especially with MS store front games, even if they perform without glitch via Steam). So many PC games are subject to poor 'stutter' and to get the best for each game you have to play with a huge set of variables or look up your favourite sites recommended settings. Then there's the fact that it's a furnace as soon as your GPU starts getting to work - it's a terrible place to play games for me, despite mine having its own LG C1 oled to play through. I will always have a high power PC, but I will always turn to a console to chill with a game.

I mean of course ABK is driving their software sales growth, they simply added an entire publisher's existing revenue to their own. How could that not be massive growth?

@Kezelpaso "unless their strategy changes again."

You're being sarcastic, right? They give the big wheel a spin once a quarter to see what the new strategy will be.

@sixrings Friendly reminder: $69B was spent to purchase King to get Candy Crush and a heavy footprint in to the massively lucrative mobile market their main competitors in Apple, Google, Amazon are already in. Activision and CoD were dead weight that came along with the purchase. Basically they only cared about getting mobile market share. The rest of gaming can take a long walk off a short pier. They got what they came for. The rest can be dumped.

@GamingFan4Lyf (Said in creepily over-calming synthesized AI voice): Welcome back.......

Nintendo will never do PC. I think they'll go Apple App store at some point, but never PC. Doesn't mesh with their market.

x3d chips can't directly compare to non-x3d chips and the R9 x3d won't be out for a while. Intel will have their x3d competitor though. Plus an AM5 now means you can upgrade through at least 2027 (AMD committed to minimum that long for AM5 which is amazing.) Especially important if NPUs become importand and MS is DEFINITELY going to push it for their games.

NV50...rumors are all over the place, but it's a sure bet the only NV50s out in 2024 will be 5090 and MAYBE 5080, and some rumors say even 5090 is pushed to 2025 now. 5070, definitely not 2024.

And remember availability will be near zero at launch like with consoles. And price is unknown, but probably more expensive.

@Titntin I read your post and my main take away is that if you eliminate the Xbox store your PC experience suddenly gets much better lol

@WhiteRabbit see we all can overcome lazyness and this time you didn't need to call me names like last time we spoke here! By the way, I agree with you Sony did acquire a lot of stuff just like MS.
MS didn't keep everything solely for itself (everything is on PC and many things on PS) and Sony are starting to do the same, a little bit late it's true but they're doing.

@themightyant it s just the beginning; i think you don't see the whole picture, they will get back the money from the acquisition in few years, ABK are making money, reaching a number of people that Xbox wouldn't have reached nor in youtube or any hard advertising campain.
For me, that i ve never care of any ABK game now i m addicted to call of duty and diablo... never cared before.
In this business they need big number of users but often is just necessary to conquer that 2% that spend like crazy.
Only future will say if their strategy is good or not, but when you are the team that's not winning, you better risk and change the conditions of the game, I appreciate what they did and I see it a cleaver move in long term

@WhiteRabbit I won't repeat here, and the comment was deleted, but I've saved the email with the notification 😁
I think you were in a bad day but I'm happy you're calmer now

@NEStalgia It's a fair point. I am hesitant to go Intel due to both cost and it's recent instability issues (I know it's getting fixed, but it still worried me for the future). Plus, everywhere I have read, the AMD 7800X3D is like THE gaming CPU to have.

I don't care about multi-tasking and productivity. The only "multi-tasking" my PC would ever do is emulating Roland SoundCanvas and MT-32/CM-32L for DOSBox/SCUMMVM.

Perhaps I should just get while the getting is good (and I got a bunch of bonuses from work).

@Mustoe My beefy PC is hooked up to my TV and I utilize Game Pass and am playing within a minute if turning it on. Obviously he's not up on PC gaming in 2024, lol.

@GamingFan4Lyf Yeah, Intel has its advantages, AMD has its advantages. For a gaming PC, unless one specifically needs Intel's advantages I think AMD's longer term upgradability on a given mobo just makes a lot more sense. Though that only matters if your mobo has PCIE5 obviously as future GPUs will need it. For production PCs it doesn't matter, you'll need new IO before you need more powerful CPUs. (and CPUs aren't actualy getting much more powerful, Intel 14th gen is kind if 13.5th gen. ALL tech hardware is in a mess right now.

The double L2 cache of the X3Ds is really incomparable for gaming, they bench worse than a standard CPU as they have to run cooler, lower boost clocks, less cores at high speeds, but the cache makes up for it in gaming where that's the main bottleneck. Intel will have a 3D cache part coming soon, but I still think if you don't need intel they're less ideal for gaming (streamers however need Intel because the x3ds don't handle all the video encoding simultaneous with the game very well.)

It's always the waiting game though. Whatever you buy, whenever you buy it, you could have had something better if you waited just that bit longer! That's the frustrating part of PC.

MS has righted the ship since the disastrous XOne release. They had to buy up some devs to make it happen, but they are no stranger to acquisitions. AKB was the feather in the cap they needed. Anyone that thinks Xbox is dying isn't paying attention.

MS is no longer focused on console sales. We are likely to only see one maybe two more generations of consoles. The rumored portable could change some of that though. Beyond consoles, MS is making moves to be a strong player in gaming for years to come.

What they are terrible at is PR.

@Pabpictu you're paying attention.

@Moby The future of Xbox is insanely bright. So many options and ways to access Xbox without being tied to a box is nice, and once all games are streamable than the flood gates could open. Growing dollars and profits is Microsoft's plan, not selling more plastic boxes than the competition.

@Ooccoo_Jr

As an investor and a gamer, I don't see any disasters in this report. Acti's inclusion in the data showing a net increase year over year of even 3% is a positive. It shows growth, albeit slow growth. The market is having a tough time in general, so this is a good thing.

Additionally, its hard to fault the content pipeline. The presentation this year was by far the best in the industry, and gamers on all platforms should be happy. (I own all platforms, have no care of what is published where. If it makes sense on xbox I get it there, if it makes sense on switch, PC, or PS I get it there. Gamepass is improving too)

So not sure how we can see anything negative about this news. Not a spin, just a reality.

Microsoft is clearly scaling back its Xbox console business outside the U.S., which is obviously affecting sales.
There is still almost always no inventory of the Xbox Series X|S in Japan.

"It's just not true if we go off and build great games, all of a sudden you're going to see console share shift in some dramatic way."

I remember this line from the guy in charge, who bought multiple studios only to have the slowest output known to man come from them. (Obsidian DID knock out two games back to back though, albeit smaller games.)

And we see the fruits of his labor. When he makes nothing, no one comes- he even doubled down by shuttering studios! Weird plan Phil. It's working though. I just have no idea how you plan to leverage it.

@Runex2121 A pathetic 3% higher than an already very small number is disastrous. Not to mention the already poor console sales are plummeting even further. This is supposed to be the peak years of the Series S/X life and yet they simply cannot shift any units. The strategy of Game Pass and hoovering up all these Developers has failed. Time for a new strategy. It is time to go all in on being a Third Party Publisher.

@NEStalgia if the activison purchase was solely about candy crush then there is no reason that game pass sub prices went up twice since the acquisition basically killing any subscription growth and killing any reason to buy an Xbox.

@sixrings I'm not sure buying ABK to get CoD and rule the console and streaming gaming world was also a good reason to raise prices twice and kill subscriber growth or any reason to buy an Xbox. I'm not sure that there's really any good strategic reason to do much of anything they do regardless of what their strategy is, assuming there is one...

@Ooccoo_Jr Selling on rival platforms is not some cure-all. They could have done that 20+ years ago. You have far more competition to contend with, for one. Third party titles now include all those that were blocked from Xbox.

You're entering a hostile environment and some users may see your titles as pariah. Dev teams would need to expand to develop more titles for Sony (and soon Nintendo). More foreign dev kits would be needed. Returns would at best be 70% of the sales price of each unit. Perhaps worst of all you may become beholden or coupled to the rival.