Inside a new era for Microsoft — and the gaming industry in 2024

09.02.2024 - 09:27 / tech.hindustantimes.com / Phil Spencer / Bobby Kotick / Mike Ybarra / Jason Schreier / Candy Crush / Allen Adham

Microsoft recently cut 1,900 jobs from its gaming division and among the layoffs were many at the recently acquired video game developer Activision Blizzard. Blizzard Entertainment's President Mike Ybarra and co-founder Allen Adham are both departing. The tech giant also announced the cancellation of a Blizzard game, called “Odyssey,” that was already six years in development. On Tuesday, Microsoft reported quarterly earnings, posting its strongest revenue growth since 2022.

Jason Schreier, the creator of Bloomberg's Game On newsletter, shares the latest on Microsoft's moves, and offers some predictions about larger trends for the gaming industry to watch for this year.

Here is a lightly edited transcript of the conversation:

Sarah Holder: Last October, Microsoft completed the acquisition of video game developer Activision Blizzard for $69 billion. Activision Blizzard is the home of World of Warcraft, Diablo and Candy Crush, and the deal was a record purchase price for the video game industry. It was also the largest single acquisition by Microsoft in the company's history. 

At the time of the deal, Microsoft became the third-largest gaming company by revenue in the world and touted its growth potential, particularly in mobile gaming. Activision Blizzard CEO Bobby Kotick echoed these sentiments on Bloomberg TV:

Bobby Kotick: I think there were a lot, a lot of great reasons for this merger. Mobile is an important part, and so building this much larger audience of players is something that I think Microsoft will continue to develop and enhance, and we're really excited about the future of gaming as a result.

Sarah Holder: Fast forward to last week, when Microsoft announced it was laying off 1,900 employees in its gaming division, mostly from Activision Blizzard. Yesterday, it announced that Blizzard Entertainment, a subsidiary of Activision Blizzard, would have a new president: Johanna Faries. She's a former NFL executive who had led the Call of Duty eSports division of Activision from 2018 to 2021 and then became GM of the franchise. 

These changes reflect a remarkable transformation in a short period of time. So, what happened? Today on the show, we called Jason Schreier, a Bloomberg News reporter and creator of Game On, Bloomberg's gaming newsletter, to find out. 

This is the Big Take, from Bloomberg News. I'm Sarah Holder.

Jason Schreier:  It all deflated last week, essentially, when this started hitting, and so what happened was I believe it was Thursday morning, news got out, and the news didn't get out through people finding out whether or not they lost their jobs. It got out through a company wide email, first from Xbox boss Phil Spencer, and then also from kind of the division heads within each company.