Microsoft clarifies Xbox revenue reports, says Activision has delivered growth

Microsoft's games division has shrugged off reports that the Activision buyout has been disappointing for revenue growth, delivers clarifying statements.

Microsoft clarifies Xbox revenue reports, says Activision has delivered growth
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Senior Gaming Editor
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TL;DR: Microsoft has clarified reports about Xbox's financial performance, highlighting record revenues of $21.52 billion in FY24, with Activision contributing $7.42 billion.

Microsoft has responded to recent reports from The Information regarding the Xbox business.

Microsoft clarifies Xbox revenue reports, says Activision has delivered growth 77

Days ago, The Information posted up a paywalled article discussing the state of the Xbox business. The picture seems dire. Janus Henderson Investors portfolio manager Denny Fish says that Activision "has been disappointing" revenue-wise, and another analysts believes that the majority of the video games market "isn't interested" in an Game Pass-like subscription model.

The reports have since been clarified by Microsoft, and our own data sets based on publicly-released financial info also reinforce some of these findings. The clarifications, which include info from both Microsoft and Activision, were given to Insider Gaming as a response to The Information's article.

Microsoft clarifies Xbox revenue reports, says Activision has delivered growth 1

Revenue-wise, Xbox has never been in a better position, breaking $21.52 billion for the first time ever in FY24 with Activision's contribution.

Data also shows that Activision contributed $7.42 billion in revenue throughout the year, accounting for 32% of full-year revenues for the period.

Microsoft clarifies Xbox revenue reports, says Activision has delivered growth 7474

Remember that these are revenues and not profits. Profits aren't disclosed, but these values had previously been deduced as part of an internal Microsoft metric called "accountability margin," or AM. This figure has been seen in the leaked FTC v MSFT court documents from 2023, which are cited throughout The Information's article, namely the mention of the 110 million Xbox Game Pass subscribers by 2030 target.

Xbox's Phil Spencer has since gone on record to say that much has changed since those targets had been outlined, indicating that these metrics, targets, and plans have been altered.

We've also discussed how achieving 110 million Xbox Game Pass subscribers by 2030 is probably not possible.

So what did the portfolio manage mean exactly? Maybe it was that Activision isn't performing nearly as well as it once had.

Microsoft clarifies Xbox revenue reports, says Activision has delivered growth 35

A quick look at Activision earnings reference data shows that the publisher's revenues had been down for the last two years in a row. Activision hit an all-time high with $8.8 billion revenues in 2021, driven by a strong mobile explosion, and then dropped to $7.528 billion in 2022.

Data is incomplete on 2023 and we don't have info on the Q3 period (July - Sept), but we do know that Activision Blizzard contributed over $2.08 billion towards Xbox's gaming revenues. This was the quarter in which Microsoft acquired ABK.

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Senior Gaming Editor

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Derek joined the TweakTown team in 2015 and has since reviewed and played 1000s of hours of new games. Derek is absorbed with the intersection of technology and gaming, and is always looking forward to new advancements. With over six years in games journalism under his belt, Derek aims to further engage the gaming sector while taking a peek under the tech that powers it. He hopes to one day explore the stars in No Man's Sky with the magic of VR.

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