“Activision Acquisition Fails to Boost Xbox Game Pass, New Report Reveals”

Microsoft’s acquisition of Activision Blizzard has not contributed to the expansion of Xbox Game Pass or the gaming sector as a whole. A recent report from The Information reveals that the growth anticipated from the acquisition has not materialized as Microsoft expected when it executed the $69 billion transaction.

The Information suggests that Microsoft aimed for the acquisition to attract more players to subscribe to the service and encourage more studios to launch their games on the subscription platform. However, sources report that “multiple prominent game studios have declined Microsoft’s proposal to place their titles on Game Pass in return for the fees that Microsoft is willing to pay the gaming studios.”

Denny Fish, a portfolio manager overseeing funds that reportedly include $800 million in Microsoft stock, expressed to the outlet, “[Activision] has been underwhelming.”

Microsoft had aspirations of reaching 100 million subscribers by 2030. As of February 2024, there were 34 million subscribers, with some joining following Microsoft’s transition of Xbox Live to Xbox Game Pass Core. Unfortunately, Microsoft has consistently missed its Game Pass growth objectives for the past two years, resulting in Game Pass growth no longer being a factor in determining CEO Satya Nadella’s compensation at Microsoft.

Additionally, the company increased its prices while introducing a new tier—Game Pass Standard—that eliminated Day One releases for console subscribers unless they switch to Game Pass Ultimate.

Moreover, Microsoft anticipated that more studios and publishers would utilize Azure cloud servers for their gaming needs. Reports suggest that Activision continues to use Google Cloud and Amazon Web Services for its server rentals, along with “primarily depending on its own servers for development purposes.”

Insider Gaming has contacted Microsoft concerning the report. Should any form of response be received, it will be incorporated into this article. Microsoft is set to announce its Q2 earnings for FY2025 on January 29.

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