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What Microsoft’s Activision Buy Has (and Hasn’t) Delivered

When Microsoft's $68.7 billion acquisition of Activision Blizzard was finalised in 2023, it was hailed as an epic moment for the gaming industry — the largest deal in gaming history and a landmark move for the Xbox's future. The purchase was promised to transform not just Microsoft's gaming arm, but also the overall competitive landscape for console giants, mobile publishers, and cloud gaming innovators. Two years later, the results are mixed. The acquisition has undoubtedly given Microsoft a competitive edge in certain areas, but some of its more ambitious promises have gone unfulfilled.

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Strengthening Xbox's Content Library

The biggest winner for Microsoft has been content. With Activision Blizzard and its subsidiary King under its fold, Xbox now owns some of the most successful gaming franchises ever made — Call of Duty, Overwatch, Diablo, World of Warcraft and Candy Crush Saga. These titles enable Microsoft to have an unprecedented breadth of intellectual property across the console, PC, and mobile ecosystems.

The Call of Duty series, in particular, has been a major strategic asset. Despite promises to make it cross-platform, Microsoft's stewardship allows for the use of timed exclusives, early access, or special editions, which will make Xbox a more attractive platform. Meanwhile, Blizzard's portfolio boasts a long-term player base from World of Warcraft and Diablo IV, which both anchor Xbox's burgeoning PC Game Pass ecosystem.

By sucking up the content pipeline from Activision, Microsoft pretty much guaranteed a steady stream of blockbuster releases for Game Pass, their subscription service. This reinforces its identity as not a console manufacturer, but a service-driven platform.

Game Pass: Growing, But Not as Fast as They Thought

At the core of the acquisition, Microsoft intended to turn Game Pass into the "Netflix of gaming." The idea was simple: bundle first-party titles, new releases and major franchises into one, affordable subscription that could drive recurring revenue. On paper, it worked. Game Pass subscriptions spiked following the deal, as gamers were drawn to the inclusion of Call of Duty and Diablo games.

However, the rate at which that growth has happened has slowed. Many gamers still prefer to own titles outright, or they stick with competing systems such as PlayStation Plus and Nintendo's digital marketplace. Moreover, Microsoft's decision to make some Activision games cross-platform — while positive to reputation and regulatory compliance — watered down the exclusivity factor that could have seen Game Pass expand more quickly.

The larger problem is consumer fatigue with subscription models. As users balance services for entertainment, software, and now gaming, the ceiling for monthly payers may have been reached sooner than expected. Microsoft's purchase had given it the catalogue it needed, but not necessarily the explosive growth it wanted.

The Mobile Integration That's Hard To Find

One of the lesser-discussed reasons for the Activision Blizzard acquisition was its mobile gaming strategy. Through King, the maker of Candy Crush, Microsoft finally got a credible foot in the lucrative mobile gaming business. The thought was to combine these properties with Xbox Cloud Gaming and create cross-platform experiences to bring mobile and console users under the same banner.

Yet two years on, this ambition has yet to be realised in much. King continues to operate independently, and Microsoft has been having trouble integrating its console-based infrastructure with the fast-paced, monetisation-heavy world of mobile gaming. The cultural divide between the two remains significant - console players are more focused on in-depth experiences, while mobile players are more interested in accessibility and microtransactions.

Still, Microsoft's patience may pay off. As cloud streaming technology advances and 5G networks spread, it may become possible to integrate mobile titles into Game Pass or the Xbox ecosystem. But for now, the company's mobile strategy appears to be a bet more on the long term rather than an early success.

Studio Culture and the Production of Art

When Microsoft acquired Activision Blizzard, it also acquired a company still recovering from internal controversies, including lawsuits over workplace misconduct and a toxic culture. Microsoft is committed to encouraging a more inclusive and transparent environment under its leadership.

There has been movement, with some leadership changes, and new HR frameworks are said to have improved morale. Yet striking the right balance between Activision's rapid, industry-driven production cycle and Microsoft's larger creative vision has been challenging. Studios like Blizzard, which in the past have been known for their slow but polished releases, are facing pressure to release more consistently to support the Game Pass ecosystem.

The result has been lopsided creative output. Diablo IV had a strong launch, but criticism over post-launch content has led to concerns, and Overwatch 2 continues to struggle with its identity and player base. Microsoft's ability to manage these studios without compromising their creative independence will be key to determining whether this acquisition ultimately drives innovation or brings control into its own hands.

Challenges to Regulation and International Strategy

The completion of the deal followed scrutiny by regulators in the US, UK, and EU, with concerns surrounding possible monopolistic behaviour and cloud gaming dominance. Microsoft made several concessions, including licensing Call of Duty to rival platforms for a decade, to secure the deal's approval.

These moves have alleviated fears of anticompetitive behaviour but also reduced Microsoft's flexibility. Ironically, to finalise the merger, it had to commit to ensuring a fair playing field, that is, not leveraging its exclusivity in as much of a way as Sony tends to do. The long-term question is whether such constraints will hinder Microsoft's global ambitions or force it to innovate differently, perhaps through cloud infrastructure and AI-based gaming.

Has The Acquisition Delivered?

In pure strategic terms, yes — Microsoft acquired a massive catalogue, a better content pipeline, and a foothold in mobile. It strengthened Game Pass with the titles that keep players engaged and expanded its presence on a global scale. However, the revolution many expected — a revolution in the cloud gaming space, subscription dominance, or unification across platforms, for example — is yet to be achieved.

Microsoft's purchase of Activision Blizzard is less disruptive and more consolidative. It stabilised Xbox's position in the market but hasn't fundamentally changed the way players experience games, or how the industry operates. The long-term benefits of the deal may still take a decade to unfold. Still, for now, the acquisition represents as much a triumph of scale as it does a reminder that even the biggest of deals can't immediately transform an ecosystem as complex and fast-moving as gaming.