Did Microsoft Want to Stop Xbox? The Company Jas Just Made a Statement!

It’s hard to imagine, but there are now rumors that the Redmond tech giant is considering shutting down Xbox in 2021, but now Microsoft is denying everything.

 

The Information reported this week that Microsoft CEO Satya Nadella could face a tough decision in 2021: either shut down Xbox or make a massive investment. As a result, Microsoft has bought Activision Blizzard King after ZeniMax, the parent company of Bethesda, meaning that the CEO has exercised option B. However, the publication also talks about the fact that, contrary to Microsoft’s plans, these investments are in vain and the company’s growth in the games segment is not enough to keep it afloat. It did not even reach the 11% target that would have been necessary for Nadella’s annual bonus (it reached 5.8%; all other segments met expectations).

According to Denny Fiosh, portfolio manager at Janus Henderson Investors (whose clients own more than $800 million of Microsoft stock), the Activision Blizzard King (ABK) acquisition has been disappointing so far. It’s a business where there’s a little bit of consistency (3-5 year period), but there’s pretty big swings from year to year because they’re anticipating big releases like Call of Duty. Call of Duty: Black Ops 6 did very well, but the question is whether it was worth it financially to put the game on Xbox Game Pass on launch day. Microsoft has not released new Game Pass subscriber numbers (the last official figure was in February of this year: 34 million). Before the ABK acquisition, the plan was to reach 100 million subscribers by 2030.

Michael Pachter, the well-known analyst, had similar thoughts, but he is more optimistic. He believes that $70 billion is not chump change, even for Microsoft. He sees it as unprofitable in the short term, which is fine if they can prove that Game Pass can be a stable revenue stream in the long term. Gus Zinn, another investment manager at the Macquarie Science and Technology Fund, said that most of the gaming market simply doesn’t want Game Pass…

These are different dividing lines. Some are adamant, some are skeptical. According to Christopher Dring, former head of GamesIndustry, developers could lose up to 80% of console sales if their game is on Game Pass. And a Microsoft spokesperson told Insider Gaming that Nadella has said he is “all in” on the games industry…

The question is how much of that is true.

Source: WCCFTech, The Information. Insider Gaming

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