Microsoft Executives Predict Gaming Growth from Advertising and Mobile Purchases
In a recent court document accidentally published on a court website, Microsoft executives revealed their predictions for the future growth of the gaming industry. They believe that advertising and mobile purchases will be the key drivers of this growth.
Background: Microsoft’s Battle Against the Federal Trade Commission
This disclosure is just one of many insider details that have emerged during Microsoft’s legal battle with the Federal Trade Commission regarding the pending acquisition of Activision Blizzard. Previous documents have highlighted Microsoft’s goal of achieving $500 billion in total revenue by 2030 and their analysis of corporate clients’ use of rival products.
Redacted Documents and Non-Public Information
In a recent court order, a judge revealed that Microsoft had submitted redacted documents to the court. However, it was later discovered that these documents contained non-public information. The court removed the documents from public view and directed the parties to resubmit documents with only public information included.
Plans for a New Xbox Console
According to the leaked presentation, Microsoft has plans to release a new Xbox console in 2028. This console would follow the Xbox Series X and Series S, which were released in 2020. The presentation did not mention the $68.7 billion Activision deal, but it is believed that Activision will play a significant role in achieving the projected revenue described in the presentation.
Growth in Gaming Revenue
The leaked document reveals Microsoft’s forecast for gaming revenue. They anticipate gaming revenue to double to $36 billion in the 2030 fiscal year, compared to a forecast of $18 billion for the 2022 fiscal year. In the actual 2022 fiscal year, gaming revenue reached $16.23 billion.
Expansion of Sales and Subscriptions
If the Activision deal is completed, Microsoft expects to expand sales of transactions across consoles and PCs. This expansion could also attract more subscribers to its Game Pass library. The forecast for fiscal 2030 takes into account growth in these two categories.
Focus on Advertising and Mobile Transactions
The leaked presentation highlights Microsoft’s focus on two emerging categories: advertising and mobile transactions. While Microsoft already collaborates with Yahoo to sell display ads for Xbox consoles, they aim to increase their presence in this area. Additionally, through their acquisition of King Digital Entertainment, the company behind Candy Crush, Activision Blizzard has gained revenue from in-app purchases and advertising. Microsoft predicts that advertising revenue will reach $1.4 billion in fiscal 2030, compared to $100 million in fiscal 2022. They also expect revenue from mobile transactions to reach $2.6 billion, up from none in fiscal 2022.
Closing the Activision Deal and Divesting Cloud Streaming Rights
Microsoft is currently working towards finalizing the Activision transaction by October 18. The United Kingdom’s Competition and Markets Authority is also reviewing a proposal that involves divesting the cloud streaming rights to Activision games to Ubisoft.
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