January 15th 2025.
In the year 2021, there was a lot of uncertainty surrounding the fate of Microsoft's gaming division. The company's purchase of Activision Blizzard was seen as a last-ditch effort to stay afloat, according to a recent report. However, things could have turned out very differently for the gaming giant.
With the low sales of the Xbox Series X/S and the shift towards releasing games on multiple platforms, it was clear that Microsoft was struggling in the current console generation. This was further evidenced by their string of multi-billion dollar acquisitions, with the $75.6 billion deal for Activision Blizzard being the most significant. This acquisition alone was responsible for keeping Xbox's profits up, as console sales continued to decline.
A new report has shed light on the desperation behind this strategy, revealing that Microsoft CEO Satya Nadella was faced with a difficult decision regarding the future of Xbox in 2021, just one year after the launch of the Xbox Series X/S. According to the report, Nadella told two people at the time that the company had two options: acquire major game studios to drive subscriptions to their Game Pass service, or shut down the gaming division altogether.
Ultimately, Microsoft chose to pursue the first option and went on to acquire Bethesda for $7 billion in 2021, followed by the massive purchase of Activision Blizzard in 2023. Before the latter acquisition, the company had set a goal of reaching over 100 million Game Pass subscribers by 2030. However, as of February 2024, the service only had 34 million subscribers, making it seem nearly impossible to reach this goal.
If the report is accurate, it helps explain Microsoft's current marketing strategy, which emphasizes the accessibility of Xbox Game Pass on mobile, PC, and other devices, without the need for an Xbox console. This strategy would make sense if Xbox was truly on the brink back in 2021.
This also adds pressure to the company's plans for the next console generation, which they have boasted will have the "largest technical leap ever in a generation." It remains unclear how this will be possible or how it ties into Microsoft's rumored plans for a handheld device.
While it may be some time before we hear about Microsoft's plans for the next generation, the company is set to showcase their upcoming games lineup in a Developer Direct on Thursday, January 23. In the meantime, fans can continue to support Xbox by subscribing to their newsletter, leaving comments, and following them on social media.
It's clear that Call of Duty has played a significant role in keeping Xbox afloat, and fans can continue to look forward to new releases in the franchise. As always, readers can submit letters and features to the Inbox without the need for an email, by using the "Submit Stuff" page on the website.
In other exciting news, a rare demo of Halo 2 was recently found on an Xbox devkit that sold for over £4,000. And there are rumors that a forgotten 90s Sega series may be making a comeback at the upcoming Xbox Direct. Fans can also mark their calendars for the release dates of highly anticipated games in 2025 for PS5, Xbox, Nintendo Switch, and PC.
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