Microsoft & Activision Deny Financial Performance Claims

In a recent turn of events, both Microsoft and Activision Blizzard have publicly denied claims regarding their financial performance, as reported by various sources. This comes amidst ongoing scrutiny and speculation about the financial health of the two companies, especially in light of their proposed merger.

A little back story…Microsoft and Activision Blizzard announced their merger agreement back in January 2022, with the deal valued at nearly $70 billion. The merger aims to create a powerhouse in the gaming industry, combining Microsoft’s technological prowess with Activision Blizzard’s extensive game portfolio.

The report came form The Information, which states that things were not lookign good for Xbox in2021 and pretty much and after a maratonic defense of the buyout of Activision Blizzard as a subsidiary of Microsoft Gaming (instead on being folded within Xbox Game Studios umbrella) in 2022, the purchase has not served the purpose of Xbox Game Pass capitalization.

To provide some context, Activision Blizzard’s financial results for the fourth quarter of 2022 showed a significant increase in net bookings, growing 43% year-over-year to a record $2.33 billion. For the full year 2022, the company reported net revenues of $7.53 billion, compared to $8.80 billion in 20211. Despite the slight decline in revenue, the company’s operating margin and earnings per share (EPS) remained robust.

Microsoft, on the other hand, has continued to show strong financial performance across its various business segments, including its gaming division. The company’s recent quarterly reports have highlighted growth in revenue and profitability, further supporting their stance against the claims made in the report1.

The denial of these claims (noted by Insider Gaming as sources are behind paywalls) is crucial for the ongoing merger process. Both companies have emphasized that the merger will enable them to better serve their players, create greater opportunities for their employees, and succeed in an increasingly competitive global gaming industry1. The deal, which has faced regulatory scrutiny and delays, is now expected to close by October 2023.

In conclusion, Microsoft and Activision Blizzard’s strong financial performance and denial of the claims highlight their commitment to the merger and their confidence in the future of the combined entity. As the gaming industry continues to evolve, this merger could set a new standard for innovation and growth.