The Verge - Microsofts overall gaming revenues are only up thanks to Activision Blizzard

Story

Total Gaming Revenue: +51%(-4% w/o ABK)

Content and Services Revenue +62%(+1% w/o ABK)

Hardware Revenue -31%

“Microsoft just posted the third quarter of its 2024 fiscal financial results. The software maker made $61.9 billion in revenue and a net income of $21.9 billion during Q3. Revenue is up 17 percent, and net income has increased by 20 percent.

This is the second quarter in a row that Microsoft is including its additional revenue from its Activision Blizzard acquisition that briefly pushed gaming to be Microsoft’s third-largest business. This time around, gaming is back into fourth place behind Windows thanks to stronger than expected Windows OEM revenue this quarter.”

“Despite a strong quarter for Microsoft with Office revenue and Microsoft Cloud revenue up 23 percent year over year, Microsoft’s overall gaming revenues are only up thanks to Activision Blizzard, with Xbox hardware revenue tanking this quarter alongside devices (Surface) revenue also dropping once again.”

“Over on the Xbox and gaming side, Xbox content and services revenue, which includes Xbox Game Pass, is up by 62 percent. This is once again thanks to Activision Blizzard revenues making up the bulk of revenue.

This quarter, Xbox hardware is down by a massive 31 percent, a big drop following a soft quarter for Xbox sales during the all-important holiday season last year. Microsoft admits the obvious in its earnings filing: that the big drop was “driven by lower volume of consoles sold.”

Overall, gaming revenue is up 51 percent, bolstered by the additional Activision Blizzard revenue, which contributed 55 points of net impact. That means without Activision Blizzard, Microsoft’s overall gaming revenue would have actually declined this quarter. The newly acquired division recorded $1.97 billion in revenue during Q3, but the cost of integration, transaction costs, and other costs of revenue in total $980 million. With other operating expenses ($1.34 billion), it calculates to an overall operating loss of $350 million for Activision Blizzard.“

Hardware on a sharp decline. ABK saving the revenue numbers but actually totaling to an operating loss… Gaming back in 4th behind Windows… Let’s see the Lems spin this news…

Xbox content and services revenue, which includes Xbox Game Pass, is up by 62 percent.. Overall, gaming revenue is up 51 percent..

what's to spin?.. 🤔

Microsoft/Xbox owns ABK.. 🤷‍♂️

Being outpaced by the Xbox One still…

Well, at least Xbox still has third place in the console market. LOLOL

Wow, it's almost like MS sort of knows how to run a business...

...and this is...bad? Is that what the tone of the OP is implying?

That MS is bad for purchasing a company and being more profitable? I mean, you could argue that from a socialist or anti-capitalist stance of course (I certainly would!) but from a business stance I fail to see how this is bad.

ABK was down, has an overall operating loss of $350M and yet accounts for 50% of that 51% gaming revenue number. The operating loss part is important. It’s the part I’ve been trying to discuss regarding Nintendo‘s business plan vs Xbox and PS that you like to ignore.

Microsoft owns ABK. ABK is sliding big and losing Microsoft money at the moment. ABK should right in with Game Pass 😂🤣

@Antwan3K: Yikes. lol

@mrbojangles25: Read the figures again. ABK by itself was down and has an operating loss of $350M. The revenue did take Xbox out of the red they would have been in without it, but ABK is tanking their profit margins

@mrbojangles25: Be concern is the mantra. lol

@ghostofgolden said:

@Pedro said:

@Antwan3K: Yikes. lol

Got you posting double, you are that triggered. LMAO

OMG! I'm so concerned!

Microsoft gaming revenue is only up because Microsoft gaming revenue is up! 😦

translation:

Xbox content and services is up 62% and Xbox gaming revenue is up 51%.. how can i spin this to make it out to be bad news for Xbox?.. 🤔🤡

lol, where's the meme of the fanboy who's thinking about Game Pass all day at work, on the bus, and in the bed?..

that's literally @ghostofgolden 🤣

Gonna have to start calling him goldencow because he puts most cows to shame here with his Xbox hate threads.

his threads have become so bad that even most cows can't be bothered to co-sign on such nonsense..

I’m no Cow but you Lems owe them for these results not being as bad as they were. Satya Nadella highlighting that they "had 7 games among the top 25 on the PlayStation Store, more than any other publisher". Just more evidence that Xbox fans and their tight and or empty wallets is what was holding Xbox back. Probably why Nadella talked more about PlayStation and their gamers than Xbox in that press release. 🤣😂

7 games on the ps top 25 charts? Wow.... Sounds like Playstation Gamers are mighty happy playing Microsoft games. They're customers. They're paying Microsoft for their games.... No one owes anyone anything.

spoken like the biggest cow ever.. 🐄

Aren't dumb posts like this the reason you lost your gamertag?

Revenues are up. That's all that matters.

Sounds pretty good to me. 🤷‍♂️

Also why keep bringing up Microsoft first party game sales on the Xbox when most people who want to play them are probably subscribed to Game Pass? You know, the service that puts those games up on day one and a service that Microsoft wants people to subscribe to. 😅

So the new strategy is having Activision counter what would have been double-digit losses across multiple segments… Activision who is running 9-figure operating losses… 😳

I hope he doesn't frantically double post this time.😂

@ghostofgolden: Here you are a cow for all intensive purposes, let's just make that clear.

Secondly when you aren't the frontrunning console in sales and TRY TO SELL your fanbase on renting games, then of course sales are going to slump, but you're wrong for blaming this on Lems.

MS created Gamepass because it screwed themselves with the XB1, $100 more, less powerful, talking about sports, 24hr checks in and the like. And Phil Spencer decided that he didn't want to try and compete and instead tried all this over crap and failed.

Don't blame Lems for this just because 2 of them on here get you sound wound up that you get your panties in a bunch.

MS are to blame here, get that right first, then you will learn to understand how MS got themselves into it's current predicament .

Another great investment by MSoft.

Some companies spend 3+ billion dollars for a single studio and are filled with regret.😎

Maybe MS going third party is the best path forward after all.

That's rough buddy...

Didnt they say this when they bought ABK? That this would boost them to third in revenue?

So.........we are bashing them because it boosted them to 3rd in revenue??

Yes!

Gaming revenue without ABK would be 4% down

And also :

• Xbox Gamepass and 3rd party ecosystem has flatlined
• Xbox hardware -31% decline in its peak years from an already near all time low year is once again dire.

Oh yeeeees, my nipples. So good

Down 31% over FY23 Q3 and 52% over FY22 Q3.

Oh yeeees.

Microsoft/Xbox owns ABK.. 🤷‍♂️

nDurr..hurr.. wha..?

Why did MS make all those recent big acquisitions? Not because they were doing great in the videogame business. It's because they lost tremendously and had nothing because they were sleeping for 20 years, otherwise they were bound to lose even more ground. As a reminder, it's the biggest acquisition in videogame history by faaaaaaaaaaaaaaaar. Sony doesn't even come close with all of the studios they acquired over time. Yeasure, "MS knows how to do business".

Some people don't keep a lot considering how much time they spent on this board.

@ghostofgolden: loool. Pedro and Antwan

Well we have the winner of the dumbest thread of the year👍

Playstation being last has frazzled tiny minds.

Cool for them. Just a wait and see how cool it is for me. I'd congratulate them, but I don't think this was a hard to do business move when you have infinite amounts of money.

I was hoping MS would change ActiBlizz from the cesspool it currently is, but they're probably more interested in just owning the cesspool and let it continue the way it currently cesspools.

I'm not a big fan of MS, cause I don't think they do much for gaming. I like their OS, that's about it. After buying ActiBlizz, I can finally say that I don't like MS. Now they're a big part of the industry that I hate, actually. And with no plans to make it better, only plans of more pofit to one of the already richest companies in the world. Let's see how fucking awful they'll be in the future.

Some companies paid 80 billion and their console died

@BenjaminBanklin: What console died after spending 80 billion dollars?🤭

lol :P

That's not the point. Point there wilk be ALWAYS a comparison without ABK. And Xbox is doing bad without.

@loudheadphones:

Xbox isn't without ABK...... reality bites

Only an Xbox hating Sony fanboy gobbles up this bullshit. I'd be more worried Sony having almost all their studios working in GaaS games then canceling most of them while undergoing spontaneous rounds of bloodletting of their long-time loyal veteran workforce and having no first part exclusives on the horizon other than porting old games to PC.

ABK is Xbox.🤭

Xbox hardware sales continue to slide, nothing new.

Xbox content, services, and overall gaming revenue is massively up. So their plan worked. Buying ABK was a success.

I’m seeing Cows all over Twitter coping about “but…but…that’s only because of ABK!” And? MS owns ABK now. You gonna cry about ABK every quarter? Boycott ABK if you don’t want to put money in MS’ pocket. Stop buying COD, stop buying COD microtransactions. It’s not Xbox’s fault your Bungie purchase was a flop and you guys keep closing studios.

How many Series consoles have MS sold in total? The way the internet talks about it, you'd think it did about as bad as Wii U.

"without ABK" isn't a thing because Microsoft/Xbox owns ABK..

"concern" only applies to Xbox for some reason..