Microsoft Executives Predict Gaming Growth from Advertising and Mobile Purchases
Microsoft executives have forecasted significant growth in the gaming industry, driven by advertising and mobile purchases, according to a leaked presentation from May 2022. The presentation, inadvertently published on a court website, revealed the company’s expectations for the coming years.
The disclosure comes amid Microsoft’s ongoing battle against the Federal Trade Commission over its proposed acquisition of Activision Blizzard. Previous documents have shown Microsoft’s ambitious revenue target of $500 billion by the 2030 fiscal year, as well as its analysis of corporate clients’ usage of rival products.
A judge at the U.S. District Court for the Northern District of California recently ordered the parties involved to submit redacted documents. Microsoft provided a link to the documents, which were then uploaded to the court’s website. However, it was later discovered that the documents contained non-public information, leading to their removal from public view.
The leaked presentation outlined Microsoft’s plans for a new Xbox console set to be released in 2028. This console would follow the Xbox Series X and Series S, which became available in 2020 and succeeded the Xbox One from 2013.
Notably, the presentation did not mention Microsoft’s $68.7 billion Activision deal, which had already been announced at the time. However, Activision is expected to play a crucial role in achieving the revenue targets outlined in the presentation.
According to the leaked document, gaming revenue is projected to double to $36 billion in the 2030 fiscal year, compared to an estimated $18 billion for 2022. Actual gaming revenue for fiscal 2022 amounted to $16.23 billion. Microsoft has not yet provided any comments regarding the leaked presentation.
The completion of the Activision deal would enable Microsoft to expand its sales of transactions across consoles and PCs, potentially attracting more subscribers to its Game Pass library. The projected growth in these areas is factored into the fiscal 2030 forecast.
Furthermore, Microsoft anticipates faster growth in two emerging categories: advertising and mobile transactions. While Microsoft collaborates with Yahoo to sell display ads for Xbox consoles, these ads are not yet widespread.
Activision Blizzard previously acquired King Digital Entertainment, the company behind the popular mobile game franchise Candy Crush. This acquisition allowed Activision Blizzard to generate revenue from in-app purchases and advertising. In 2022, the King subsidiary contributed $2.79 billion in revenue, marking an 8% increase.
According to an email from Phil Spencer, CEO of Microsoft’s gaming business, Microsoft sees Activision as a “mobile first publisher.” The leaked presentation indicated that Microsoft expects its advertising revenue to reach $1.4 billion by fiscal 2030, up from approximately $100 million in fiscal 2022. Additionally, revenue from mobile transactions is projected to reach $2.6 billion, compared to zero in fiscal 2022. Together, these two categories would account for $4 billion, or 11% of total gaming revenue.
Microsoft aims to finalize the Activision transaction by October 18. The United Kingdom’s Competition and Markets Authority is currently evaluating a new proposal that involves divesting the cloud streaming rights to Activision games to Ubisoft.
You must log in to post a comment.