Microsoft Gaming Revenue Grows 49% Due to Activision Acquisition, Xbox Hardware Up 3% Year-on-Year

Microsoft announced its financial results for the second quarter of the fiscal year 2024, including details on the ongoing performance of the Xbox business.

[purple101]

“ Above you can see the full impact of the acquisition, including $2.08 billion in revenue and $440 million in operating loss. “

They brought Activision and still lost 440 million. How ??!!??!!

[Abriael]

Because acquisitions cost money. It's not rocket science. 😂

[Eonjay]

I think most people would correctly assume that the cost of acquisition was covered in the cash payment of 69 billion.

Your comment doesn't make sense and comes off as condescending (and I know that isn't your intention). Without actually seeing what contributed to the loses, you are pulling your answer out of thin air. Any number of things could have contributed to the loss including lower than expected sales, higher than expected development costs, things completely unrelated to Activision projects, costs related to Gamepass expansion, investments in undisclosed projects, or manufacturing overhead related to the holiday sales. If Microsoft isn't telling, you aren't telling lol.

All you know is that revenue wasn't enough to cover losses. And nothing more.

[Abriael]

@Eonjay: The cash payment is recorded through multiple quarters starting with this quarter, so it generates expenses (and as such loss) until it's made up for, or do you think it somehow doesn't get recorded in financial results?

On top of that, acquisitions have additional costs, and not small ones, including the costs to integrate the companies, administrative costs, and so forth.

This shouldn't even be a question. To be entirely honest with you, the answer was condescending because the question was incredibly dumb.

[Eonjay]

I was under the impression that they paid cash for Activision. I'm not privy to their internals and this is an assumption (as I have said already) and of course so I could be mistaken. Either way, you have to admit that you are also making an assumptions. We just don't know and that fine. Has anyone made the obvious connection that some of the loss may be due to payroll? That is about 300 million they just shaved off of their internal costs. Although now that I think about it, that would be related to the acquisition and that would make you right lol.

[purple101]

I assumed activisions massive profits would cover the cost to integrate and other expenses such as the 440 million, would very easily be covered

[GamingSinceForever]

You’ve been a jackass since your Dualshocker days. I see not much has changed.

[Abriael]

All payments have to be recorded in the financials, and Amy Hood literally explained it in the conference call a minute ago.

[Babadook7]

“Because acquisitions cost money. It's not rocket science. 😂”

You do realize they didn’t get ABK for 440 million right?? 😂

That being said let’s not pretend ABK is going to be a net positive for many years, if ever.

[MrDead]

All this and they added no new games to Xbox from the publisher buyouts and banning's. MS just exists to feed money to money.

[Zeref]

Starfield, HiFi Rush, Redfall, Ghostwire Tokyo, Deathloop, Pentiment, Grounded.

Why lie?

[MrDead]

@ zerer

Are you saying that Bethesda games were never coming to Xbox?!

Silly Zerrrr

I would ask you "why lie" to you, but I think it's obvious

[Lightning77]

I highly doubt ABK will be exclusive to Xbox and PC. ABK will be multiplat. Satya even said it himself a few week ago. There might be some exclusives but Spyro, Crash, COD will remain multiplat plus more.

[Zeref]

You said the acquisitions buyout never brought new games.

I showed you the games they published that were from the recent acquisitions.

But you're saying it doesn't count because they were coming to Xbox? You sound ridiculous.

According to the rule you just made up for the sake of proving your dumb point literally nothing that comes from the acquisitions count lol.

@Lightning77

Who said anything about ABK??
Either way we don't know their plan with ABK yet. Should be soon. But I think everything except CoD will be exclusive.
If they made Starfield exclusive why wouldn't they make smaller games like Spyro and Crash exclusive.

[MrDead]

You're celebrating games you were already getting and MS's revenue increase at the cost of competion and thousands of devs jobs.... well done MS you truly are the saviour!!

[Lightning77]

@Zeref Popular IP that's available every where these days, minus the PS1 days. Again MS doesn't gain as much as you think by keeping those games on Xbox and PC when they can maximize the popularity of those ips that everyone knows and loves and put them on everything. SF is a new IP that Sony almost locked down as an exclusive until MS bought BZ. They want to make that game I guess "unique" to Xbox and especially the PC crowd. In fact I strongly believe if the game was timed exclusive on PS the PC version would come later.

Anyway regardless. Spyro and Crash are familiar family friendly ips where those games are already multiplat. SF simply isn't.

[recoctimocassirnff]

This is why ms fanboys are objectively the worst.

They champion monopolistic acquisitions while ignoring all it's sever negative consequences. And no matter how many times you slowly explain to them, they can't grasp the simply concept that they were going to get these 3rd party games regardless if ms wasted billions to block them from going to other platforms or not, as Zefef has so pathetically demonstrated.

But hey, you'll get them "free" day one on gamepass, right? So who cares about the destruction of the gaming industry, as long as your idiot selfish needs are met.

[krevshai]

@Lightning77 Anything not COD related will be exclusive including a new Crash or Spyro, you're huffing mad copium right now, you people thought Bethesda games would be multiplat too. IF something as massive as Elder Scrolls is going to be exclusive, anything else not COD will be too

[GamerRN]

To the people who don't understand operating costs, let's see what the next 2 years brings... Then you can talk smack

[fr0sty]

Nobody talking about how Xbox hardware only grew 3%, meaning that all these acquisitions did not lead to more people buying Xboxes, which only reinforces the issues Microsoft is facing that led Phil to say Microsoft is considering getting out of console gaming. Their services are growing, their hardware is not... so why would they continue to dump billions into trying to make hardware when they can make their games multi-platform and make billions more without having to waste money on R&D and competing in a market they've never once succeeded in before?

[ChasterMies]

Because Microsoft considers Activistiom an asset worth $70B, they say they lost nothing in the purchase. In truth, they should deduct $70B from gaming revenue but that’s accounting for you.

[Hofstaderman]

Inorganic growth to cover up for a very organic decline. Classic corpo accounting. But they will not be able to report like this indefinitely.

[FinalFantasyFanatic]

They still made over $1.5 billion, even though a quarter is quite a big chunk of money to lose out on.

[Darkegg]

“ Activision’s CEO Is Looking at $375 Million Payday in Microsoft Sale”

Is that part of the 440 million operating loss? I really don’t know the answer.

[MrDead]

Well done MS!
You've brought no new games to Xbox from these mergers but you've made Bobbie Kotick a far more wealthy man and a handful of CEO's and shareholders too, all that it cost was the firing of thousands of workers and limiting multiplatform publishers access to their biggest console revenue stream and its gamers.

Why create when you can just take what's already there and limit who can and can't play? Start consolidating the industry and oh look I'm earning more money, this is why companies like MS should be broken up as they can use their finical might to influence any industry they enter and kill competition.

[Abriael]

Instantly summoned as expected. 😂

[LiViNgLeGaCY]

Yeah, like you're ANY damn better. Shut up.

[Abriael]

@MrDead: The only thing that's not healthy is hating a company that makes games as much as you do. You've been this angry for months. Isn't it about time to chill?

That being said, it is entertaining how you instantly appear in all related posts like you had some sort of notification ringing on all of your devices, tho. 😂

[fr0sty]

They don't make games, they buy companies that do, then run them into the ground.

[notachance]

Hey abriael where’s the weekly report on how much dollar star citizen made by scamming people?

[gerbintosh]

"@MrDead: The only thing that's not healthy is hating a company that makes games as much as you do"

So, zero games then?

[TheKingKratos]

@Abriael

Amazing how you didn't address anything he said and only resorted to childish comments to him

Yet he speaks the truth on all this .... You should be objective with how you write an article and objective while talking in the comments section instead of doing The MS defence force routine

[rippermcrip]

Also as expected, you're in the comments of your own submission arguing, stirring up drama and insulting readers.

That's why no one likes you. You have no integrity which you show in multiple ways.

[darthv72]

you: "Why create when you can just take what's already there and limit who can and can't play."
people with common sense: ...... "just buy an xbox."

[MrDead]

"just buy an xbox."

So you support the limiting of choice where you can now play two of the largest publishers in gaming and the firing thousands of devs?... interesting, I always had you down for supporting a heathy industry. I guess I was spectacularly wrong there

[notachance]

lol are you an american? Here in asia no one play on xbox, common sense is buying ps or nintendo instead because all your friends are there

[Barlos]

"Just buy an Xbox"

And support the ongoing March to a digital future, industry consolidation, less choice and less competition? No thanks

[Realms]

Or MS can just create good games, but nah will just buy as many developers as we can to drive our agenda. Conglomerates are bad for consumers, Disney proves why nobody should want big corporations owning so many original IP's.

[Asplundh]

We got it the 1st, 2nd, 3rd and 4th time.

[MrDead]

Then why are you commenting?

I can go on if you want, it seems like you do. Did you know this is the second round of firings at Bethesda since MS took over, the first was because of lower than expected revenue from Azure. What do you think of gaming devs being fired to protect MS stock from dropping from an unrelated department?

The price of industry consolidation

[porkChop]

"but you've made Bobbie Kotick a far more wealthy man"

There was literally no way around that. Bobby owned at least 4.2 million shares in ABK. All shareholders got paid $95 per share. Would you have preferred Bobby stayed around instead? You people love to complain without having any idea what you're even talking about.

[MrDead]

I would have loved MS to stop industry consolidation, removing publishers from competitors and firing thosands of workers. Something that wouldn't be happening right now.

Also didn't MS buying Activision cause Bobby Koticks shares to rise making him far more than if he was just kicked out? ... Oh yeah it did, he has MS to thank for that massive financial win fall.

[porkChop]

"Also didn't MS buying Activision cause Bobby Koticks shares to rise making him far more than if he was just kicked out?"

Ok, so once again, you literally don't understand what you're talking about.

1) He was never going to be kicked out without the acquisition. ABK was making tons of money and that's all the investors and board cared about. No one was forcing him out.

2) When you acquire a company you agree on a purchase price per share. Once you agree, that's what you pay regardless of whether the shares rise of fall by the time the acquisition closes.

[Lightning77]

Talk about pot meeting kettle and lack of self awareness. Telling someone to touch grass when you're the biggest complainer about a 3 trillion careless company makes you look 10 times worse. The more you complain and lose sleep the more they make that's what you don't get and that's what's funny about you.

[Ninver]

F@ck Microsoft. That's what I think of them.

[Barlos]

Microsoft's motto" if you can't beat them, buy them.

[crazyCoconuts]

Even when you subtract the acquisition impact, there's a small increase in revenue on the services front as well.
Have no idea what profit looks like of course (especially with those holiday hardware sales) but at least revenue isn't going down...

[Zeref]

Hardware is effectively up by 20 percent. It's because of ABK that it's only showing 3 percent.

https://x.com/Welfare_JBP/s...

[crazyCoconuts]

What? No that's not what that says lol
ABK doesn't impact hardware.
That guy is trying to figure out where the difference is coming from. Do you really not understand what you're reading?

[FinalFantasyFanatic]

That doesn't make sense, are you sure it's not Hardware+ABK (3%+17%)? And not just Hardware that is up 20%?

[Juancho51]

All this success yet they still had massive layoffs had operating losses and destroyed projects developed for years. Imagine what they’d do if they didn’t have this “record” growth. Toxic garbage company.

[darthv72]

To be fair, there would still be layoffs no matter if they had growth or not. It's an industry wide situation, not just limited to a handful of mega corps. Little guys have been affected too.

[crazyCoconuts]

and to add to what darth said, since we're only seeing revenue as a whole, we don't see the profit / expense side. Increased revenue doesn't necessarily mean increased "success" if there are bigger losses. We still really don't know how profitable Xbox actually is. Layoffs are another way to control expenses.

[Tedakin]

They cancelled one project that was in development hell. Maybe it was another Redfall. They got a ton of hate for not cancelling that game.

[Profchaos]

I know there's two thousand families celebrating this news right now

[fr0sty]

They can't handle that kind of truth... just like they can't tell the difference between "revenue" and "profit".

[RhinoGamer88]

I can only imagine Phil and his C Suite chum's bonuses this year. #failtown

[Profchaos]

Probably got a private island when Activision deal finalised

[ChasterMies]

Software is much more profitable to Microsoft than hardware. Now can you see why Microsoft will eventually publish Xbox games on PS5?

[Eonjay]

It always made sense to me that they would publish to PlayStation. They purchased mulptiplaform publishers. The only way to maximize that purchase is to remain multiplatform.

[Plague-Doctor27]

Software is much more profitable to Sony too. Looking at their last financial report software was almost 2x as much revenue

"Sony announced results for the second quarter of fiscal 2023 (July-September 2023). Its revenue rose 32% year-on-year to ¥954.1 billion ($6.32 billion).

Of that amount, ¥479.3 billion ($3.2 billion) came from game and content sales. Revenue from console sales totaled ¥287.5 billion ($1.9 billion), and revenue from game services was ¥133.9 billion ($887 million)."

[ChasterMies]

Sony also makes 30% of every software purchase on the PlayStation store. So does Microsoft on the Xbox store, except the growing marketshare of PlayStation means more money for Sony and less for Microsoft. Software is agnostic to hardware marketshare.

[YourMommySpoils]

So who's actually buying this hoax article.

[Plague-Doctor27]

This is literally straight from their earnings report. These are the numbers they give to shareholders

[recoctimocassirnff]

and ms is a totally respectable company and they've totally never manipulated, omitted or out right lied constantly..... No, never.

[Plague-Doctor27]

@recoctimocassirnff

Uhh I mean lying about these numbers is actually illegal (unlike lying to gamers) and they'd be lying to shareholders, who are the only people who can actually hurt them.

Also, if they're going to lie these numbers arent the greatest.

MS FY Oct- Dec 2022 4.758B + Activision Oct- Dec 2022 2.33B = 7.09B for Oct-Dec 2022
They had literally no growth from 2022 to 2023, they just combined their revenues. They also admit their console business is failing. Why would they share numbers like this if they were lying

[Lightning77]

So every earning report is a lie. My bad only when they're doing bad is when it's accurate. I forgot this is N4G logic we're talking about here.

[Trilithon]

didnt read it

[frostypants]

Nah the numbers are real. It's just a matter of interpretation as to whether they are actually "good".

[Plague-Doctor27]

Straight from their conference call: "Total gaming revenue in line with expectations due to stronger than expected performance from activision, with offsets from weaker than expected performance from the console market."

They are expecting about $300 million in revenue from consoles in Q1 2024. They are expecting to ship less than 1 million consoles globally for the next quarter

They got completely carried by ABK. Can easily see why they fought for this merger so badly. Definitely see them staying in the game though

[babadivad]

Cool, I guess...

[zacly]

and they laid off 2000 people.

[andy85]

I fail to see how hardware gained year on year in revenue when they sold a lot less year on year?

[andy85]

Coupled with the fact there was heavy discounts too and still less units sold. How did it gain YOY 🙃

[YourMommySpoils]

Exactly. Just a rubbish report.

[mkis007]

It's weird to buy something that makes money, to make money, and then reduce its money making from where it was by 50 % or more.

[generic-user-name]

COD is the biggest part of that money making and it's still available as before.

[Darkegg]

If the revenue grows, why are ppl losing jobs ??

[dveio]

In the worldwide top 10 of the biggest companies that have always been a complete shitshow and cancer to healthy economic competition, innovation, protecting and advocating rights, and ecological balance, I can't decide wether I'd put Microsoft at sixth or seventh place. Or maybe even at fifth.

Looking forward to MS paying that 29bn dollars they've embezzled over a decade back to US tax payers next. This should ... have a little effect on their screwed reports anyhow.

[Obscure_Observer]

Great numbers as expected

[XiNatsuDragnel]

Good numbers but Microsoft never disappoints me with the numbers games.

[gold_drake]

and yet they laid off 1900 people.

[tagzskie]

I just wish they legalize making fun of people whose supporting these company because theyre that dumb. Theyre rejoicing MS revenue growth while firing thousands of employees. Dont be mad but i think fanboys have a kinder garden level mindset

[gold_drake]

its so nice to see how MSs monopoly stragety plays out and how you can just grow from buying out other big companies that make you more rich than ever before.
im so glad that this is A-OK in todays world, we had no substancial games coming from them and they STILL made huge revenue profits. congrats, really. proud of ya
but i absolutely understand how you HAD to fire almost 2000 people cause of it. i mean it was THE obvious choice.
/s

[anast]

They are still loosing money.

[TheCaptainKuchiki]

If you can't do it on your own, use the "money" cheat code

[neomahi]

Wait...... What?

[jimbo676]

MS didn't make 70 billion this quarter to cover the losses. complete failures.

[__y2jb]

They have so much scope now to twist and distort the true state of their gaming business. Basically you will never know just how bad xbox is doing because they will hide behind twisted metrics such as including playstation cod players and mobile candy crush players.

[DOMination-]

Another sensational year full of wonderment awaits, go team green!

[Reaper22_]

Excellent news for Microsoft and Xbox fans everywhere.