Microsoft's Growing Gaming Ambitions

If any further proof was needed that Microsoft is taking gaming seriously, the company’s attempted acquisition of Activision Blizzard was a definite statement of intent. Last January, the Redmond, Washington-based tech giant announced its plans to acquire the studio in an all-cash transaction valued at $68.7 billion.

Since then though, the deal has come in for some serious scrutiny. The sale was initially blocked by regulators in the United States, the EU and the UK and while the U.S. Federal Trade Commission still hasn't retracted its objections, it has been unable to secure a court injunction to stop it. After accepting concessions from Microsoft, the EU Commission stepped out of the way in May. The final roadblock was the UK's Competition and Markets Authority, which today announced that it would be allowing the acquisition to move forward - just five days before the deadline to complete the deal.

This is now Microsoft’s largest acquisition by far. In 2016, the Windows-maker had bought professional social network LinkedIn for $26.2 billion in its then biggest purchase to date. Activision Blizzard is one of the world’s most renowned video game studios and owner of iconic franchises such as Warcraft, Diablo, Call of Duty and Starcraft.

As this chart shows, Microsoft’s gaming business, which was kickstarted with the release of the first Xbox in 2001, has nearly tripled in size over the past decade. Pushed by large-scale acquisitions, e.g. Minecraft maker Mojang in 2015 and ZeniMax Media in 2021, as well as the 2017 launch of the popular subscription service Xbox Game Pass in 2017, Microsoft’s gaming revenue climbed to $16.2 billion fiscal year 2022. In 2023, revenue dipped slightly due in part to a drop of in sales of its latest consoles, but remained slightly above the bar set in 2021. Adding Activision Blizzard to the fold, Microsoft’s gaming business will instantly grow by roughly 50 percent, bringing its annual revenue way past $20 billion.