Microsoft's Growing Gaming Ambitions

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

The deal is expected to close in the fiscal year 2023 (ending June 30, 2023) and would be Microsoft’s largest acquisition by far. In 2016, the Windows-maker had bought the professional social network LinkedIn for $26.2 billion in its biggest acquisition to date. Activision Blizzard is one of the world’s most renowned video game studios and the owner of iconic franchises such as Warcraft, Diablo, Call of Duty, and Starcraft.

As the following 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 $15.4 billion the fiscal year 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.