Microsoft's Activision Acquisition Fails to Boost Game Pass Growth as Hoped

The $75 billion deal has not met expectations for subscriber growth or Azure adoption, raising questions about Microsoft's gaming strategy.

Microsoft's Game Pass revenue grew by only 5.7% in the year to June 2024, falling short of the company's internal target of 11%.
The company had hoped the Activision acquisition would attract developers to its Azure cloud services, but even Activision continues to rely on competitors like Google Cloud and AWS.
Game Pass subscriber numbers, last reported at 34 million in February 2024, remain far from Microsoft's ambitious goal of reaching 100 million by 2030.
Some developers have reportedly declined to release their games on Game Pass, citing concerns about the platform's value proposition and technical challenges with Xbox hardware.
Internal discussions in 2021 considered winding down the Xbox division before opting for an acquisition strategy, including the $7 billion ZeniMax deal and the $75 billion Activision purchase.