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[diffusionx]

I understand that he is managing a lot of money, but the quote itself doesn't provide a lot of context. I've worked with investors before from JPM (where this guy worked previously apparently) and despite managing a lot of money they aren't necessarily privy to any more detailed information day to day than any other investor, they have to make educated assumptions.

Would be good to be able to see the full quote to see how he believes Activision has been disappointing. As it stands it looks like the journalist needed a quote from an investor to back up his article and squeezed this one in.

Yes, many times it is a hunch or something similar, and he's not going to spell it out to a journalist who wouldn't understand anyway.

But just like thinking it through has Activision really brought value-add to MS? Tough to see. Seems like they just incorporated their revenue streams into the business and they are continuing as before. MS+Activision is certainly bigger but where is the evidence it is better?

 

[Hero of Spielberg]

Yes, many times it is a hunch or something similar, and he's not going to spell it out to a journalist who wouldn't understand anyway.

But just like thinking it through has Activision really brought value-add to MS? Tough to see. Seems like they just incorporated their revenue streams into the business and they are continuing as before. MS+Activision is certainly bigger but where is the evidence it is better?

Reading the surrounding text closer, it seems more like the investor's context is that Activision hasn't positively affected the share price as they would have hoped.

'Some shareholders say Activision’s contribution won’t matter much as long as Microsoft generates growth in other areas like cloud and artificial intelligence software sales.

“[Activision] has been disappointing,” said Denny Fish, a Janus Henderson Investors portfolio manager who oversees two funds that included a total of more than $800 million in Microsoft stock as of November. “It’s also a business that had some degree of consistency over, like, a three- to five-year period but was highly volatile from year to year, because you’re so dependent on the big releases like Call of Duty.”

However, Microsoft’s heavy spending on data centers for AI is a bigger drag on its stock price than the Activision deal, Fish said.'

And share price being a representation of what the market 'feels' it's really no surprise that MS would want to jump in this to put investors at ease.

 

[Unknown?]

The information is a really well-respected outlet amongst high-powered execs, and they are known for high-quality journalism.

For example, they broke the FTX scandal that led to Sam Bankman-Fried's incarceration.

Papa Nadella about to go on a killing spree! Activision was his idea.

 

[Ozzy Onya A2Z]

GAF is now a place where any rumour or opinion piece going negative on MS/Xbox is taken as gospel and a multi page thread. How wonderful.

CEO literally states record GP subs/revenue due to COD BLOPS but hey keep having at it GAF.

Regarding Xbox Game Pass, Nadella said that the service set a record for the number of new Game Pass subscriptions on Call of Duty: Black Ops 6’s launch day. He added that the service “set a new Q1 record for total revenue and average revenue per subscriber.”

Honestly as an Xbox fan I find myself wanting to come to GAF gaming side less and less these days. Good show gaming fans. Good show.

 

[MayauMiao]

I miss Baghdad Bob

Its okay, we have Phil Spencer.

 

[diffusionx]

GAF is now a place where any rumour or opinion piece going negative on MS/Xbox is taken as gospel and a multi page thread. How wonderful.

CEO literally states record GP subs/revenue due to COD BLOPS but hey keep having at it GAF.



Honestly as an Xbox fan I find myself wanting to come to GAF gaming side less and less these days. Good show gaming fans. Good show.

CEO is going to say whatever he wants to spin his narrative. It's reasonable to scrutinize his claims.

Reading the surrounding text closer, it seems more like the investor's context is that Activision hasn't positively affected the share price as they would have hoped.

'Some shareholders say Activision’s contribution won’t matter much as long as Microsoft generates growth in other areas like cloud and artificial intelligence software sales.

“[Activision] has been disappointing,” said Denny Fish, a Janus Henderson Investors portfolio manager who oversees two funds that included a total of more than $800 million in Microsoft stock as of November. “It’s also a business that had some degree of consistency over, like, a three- to five-year period but was highly volatile from year to year, because you’re so dependent on the big releases like Call of Duty.”

However, Microsoft’s heavy spending on data centers for AI is a bigger drag on its stock price than the Activision deal, Fish said.'

And share price being a representation of what the market 'feels' it's really no surprise that MS would want to jump in this to put investors at ease.

Right, that's what i was getting at in terms of it being better. You would expect a $80B transaction to transform and enhance your company in some way - hence why MS is saying they are spending that amount on AI. But if it is just merging the revenue streams into MS and the new price is old MS price + old Activision price then that's not good.

 

[Ozzy Onya A2Z]

CEO is going to say whatever he wants to spin his narrative. It's reasonable to scrutinize his claims.

No it's not reasonable and there was zero spin in his statement. CEOs and board members are held to laws about such statements. But you do you. It's not marketing, it's facts he spout. Pity a lot of posters and threads on GAF have more spin than the MS CEO but they seem to be taken just fine now don't they? Funny that.

 

[adamsapple]

Reading the surrounding text closer, it seems more like the investor's context is that Activision hasn't positively affected the share price as they would have hoped.

'Some shareholders say Activision’s contribution won’t matter much as long as Microsoft generates growth in other areas like cloud and artificial intelligence software sales.

“[Activision] has been disappointing,” said Denny Fish, a Janus Henderson Investors portfolio manager who oversees two funds that included a total of more than $800 million in Microsoft stock as of November. “It’s also a business that had some degree of consistency over, like, a three- to five-year period but was highly volatile from year to year, because you’re so dependent on the big releases like Call of Duty.”

However, Microsoft’s heavy spending on data centers for AI is a bigger drag on its stock price than the Activision deal, Fish said.'

This is the first time I've read the trailing top and bottom quotes, they make it seem like Fish's concern is that Activision is cruising along at its current pace.

The point about the AI centers also puts it in different light, reading the previous topic and some of the replies in this one, you'd think Denny is being directly critical of Activision as the main thing.

 

[diffusionx]

No it's not reasonable and there was zero spin in his statement. CEOs and board members are held to laws about such statements. But you do you. It's not marketing, it's facts he spout.

"most subs ever" is a meaningless statement. It has no numbers, because MS does not provide numbers. It does not provide context. You would expect record subs for putting the most popular game on your service. That is the expectation. So telling us they met expectation isn't telling us much of anything. You expexct record revenue when you incorporate a massive company into your income statement lol. It doesn't mean anything.

It's like when Netflix talks about how they set a record high in viewers with the NFL games. Like no shit, NFL is the most popular sport. Of course more people watched. It doesn't mean anything. The question is whether or not it drives actual growth and profitability.

 

[Hero of Spielberg]

This is the first time I've read the trailing top and bottom quotes, they make it seem like Fish's concern is that Activision is cruising along at its current pace.

The point about the AI centers also puts it in different light, reading the previous topic and some of the replies in this one, you'd think Denny is being directly critical of Activision as the main thing.

The way I read it is he's basically saying, the acquisition of Activision hasn't given a bump to share price as they would have hoped as investors, but the bigger picture is how MS performs with regard to AI.

Strange that he'd word it as a 'drag' on the share price too, given the share price has increased since the announcement about investment in the AI data centers.

Then again you would also think that investors like this would be thinking more long-term which would then also be strange to comment on such a short-term outcome RE Activision.

 

[Ozzy Onya A2Z]

"most subs ever" is a meaningless statement. It has no numbers, because MS does not provide numbers. It does not provide context. You would expect record subs for putting the most popular game on your service. That is the expectation. So telling us they met expectation isn't telling us much of anything. You expexct record revenue when you incorporate a massive company into your income statement lol. It doesn't mean anything.

It's like when Netflix talks about how they set a record high in viewers with the NFL games. Like no shit, NFL is the most popular sport. Of course more people watched. It doesn't mean anything. The question is whether or not it drives actual growth and profitability.

Nah you're just spitting a bullshit narrative there mate. CEOs aren't able to lie about record subs nor record revenue statements. Period.

Again it IS factually meaningful as it states clearly and legally what the record facts are. The context is record numbers, simple. You just want some over bloated exact numbers for some asinine personal reasoning to compare to what Sony PS or some other competitor? So you don't get some made up specifics of your own accord which falsely equates to you justifying your own statement about MS must be lying.

Glad you apply the same scepticism to anti MS/Xbox posts here /S.

The logic...

You would expect record subs for putting the most popular game on your service.

So they achieve exactly your expectations and you're still bitching about lying? Logic indeed.

 

[Unknown Soldier]

The fact that they would issue an official denial is pretty telling in and of itself. MS is well known for heavily obfuscating their numbers for almost all divisions not Windows, Office, and Azure because that's what makes them the real money. Everything else is operated at a loss, subsidized by those 3 things, hidden in clever accounting tricks

 

[Vyse]

This thread is more exciting than the Switch 2 reveal!

 

[ChorizoPicozo]

This thread is more exciting than the Switch 2 reveal!

wait, there was a reveal?!

 

[diffusionx]

Nah you're just spitting a bullshit narrative there mate. CEOs aren't able to lie about record subs nor record revenue statements. Period.

Again it IS factually meaningful as it states clearly and legally what the record facts are. The context is record numbers, simple. You just want some over bloated exact numbers for some asinine personal reasoning to compare to what Sony PS or some other competitor? So you don't get some made up specifics of your own accord which falsely equates to you justifying your own statement about MS must be lying.

Glad you apply the same scepticism to anti MS/Xbox posts here /S.

The logic...



So they achieve exactly your expectations and you're still bitching about lying? Logic indeed.

Nobody is accusing him of lying, first of all.

Second of all, I'll repeat myself. The question is whether or not it is driving growth and value. Not just bolting on Activision to MS. Obviously bolting Activision onto MS is going to result in more revenue. So proclaiming so doesn't really say anything. If (MS+Activision) = MS + Activision then it's a bad deal. The point is for the sum to be greater than the two parts, not equal to.

Nobody is console warring except you.

 

[Mattyp]

Wait for the next quarter revenue to see it be record breaking

 

[Ozzy Onya A2Z]

Nobody is accusing him of lying, first of all.

Second of all, I'll repeat myself. The question is whether or not it is driving growth and value. Not just bolting on Activision to MS. Obviously bolting Activision onto MS is going to result in more revenue. So proclaiming so doesn't really say anything. If (MS+Activision) = MS + Activision then it's a bad deal. The point is for the sum to be greater than the two parts, not equal to.

Nobody is console warring except you.

Nah, I just don't agree with any of your logic or opinion, it's baseless. Here are your own statements, again contradicting yourself in two sentences from the same reply -

The question is whether or not it is driving growth and value.

Obviously bolting Activision onto MS is going to result in more revenue.

I think you're confused mate.

So now we have mud slinging...

Nobody is console warring except you.

Cool, thanks for that. Have a good one.

 

[diffusionx]

Nah, I just don't agree with any of your logic or opinion, it's baseless. Here are your own statements, again contradicting yourself in two sentences from the same reply -





I think you're confused mate.

So now we have mud slinging...



Cool, thanks for that. Have a good one.

revenue <> value, that's literally the point

And you're the one who brought up Sony, so yea, you're console warring.

 

[ChorizoPicozo]

The fact that they would issue an official denial is pretty telling in and of itself. MS is well known for heavily obfuscating their numbers for almost all divisions not Windows, Office, and Azure because that's what makes them the real money. Everything else is operated at a loss, subsidized by those 3 things, hidden in clever accounting tricks

Some people will never be able to see how it is possible that Xbox is not in a good financial position. (they will continue to believe the PR spin coming from executives and shills)

What is it going to take after everything that has happened so far? Even if Xbox gets shut down, they will believe that it was because of the Xbox Tax and the negative vibes from GAF

 

[ReBurn]

Microsoft said "nuh uh" so now it's time for the analyst to come back with "yes huh."

That's how these things work

 

[onQ123]

Adam stand down lol

 

[laynelane]

Feels like microsoft are likely playing a little fast and loose with some cherry picked data to tell the story they want to tell.

Ofcourse it’s contributed a massive amount to xbox divisions revenue…there’s a lot of big games that are now part of their revenue…if you forget to include the -$80bn, and the vast staff costs.

It’ll also look much rosier depending on what window they choose to look at, last few months? Probably not a pretty sight given all the big recurring revenue IP under acti are in pretty sudden and fairly significant decline, whether that’s cod losing 80% of its players a month after cod6, or similarly with overwatch after rivals launched etc.

And how much has it actually boosted gamespass? They need year on year 40% growth? Did it do that year 1? How’s its current trend?

I'm very interested in the impact releasing CoD on Game Pass has had. Was there a increase in subs and how did it effect individual sales (compared to prior releases)? I don't know if we'll get that data or if we'll just have to wait and see how the IP is handled in future releases.

 

[laynelane]

I understand that he is managing a lot of money, but the quote itself doesn't provide a lot of context. I've worked with investors before from JPM (where this guy worked previously apparently) and despite managing a lot of money they aren't necessarily privy to any more detailed information day to day than any other investor, they have to make educated assumptions.

Would be good to be able to see the full quote to see how he believes Activision has been disappointing. As it stands it looks like the journalist needed a quote from an investor to back up his article and squeezed this one in.

I'm not familiar with this type of thing. Would the disappointment come purely from a financial perspective or would it be from MS' own stated goals behind the acquisition? Or maybe a combination or something else entirely?

 

[GHG]

I understand that he is managing a lot of money, but the quote itself doesn't provide a lot of context. I've worked with investors before from JPM (where this guy worked previously apparently) and despite managing a lot of money they aren't necessarily privy to any more detailed information day to day than any other investor, they have to make educated assumptions.

Would be good to be able to see the full quote to see how he believes Activision has been disappointing. As it stands it looks like the journalist needed a quote from an investor to back up his article and squeezed this one in.

Nah, you don't get to a fund manager position at a business of that size without having the necessary relationships in the companies that they are heavily invested in. It's just the way it is.

 

[Hero of Spielberg]

I'm not familiar with this type of thing. Would the disappointment come purely from a financial perspective or would it be from MS' own stated goals behind the acquisition? Or maybe a combination or something else entirely?

Judging by the lines surrounding the quote it seems to be about share price. But without seeing the full discussion and understanding in what context he thinks Activision has been disappointing it's difficult to say.

 

[Hero of Spielberg]

Nah, you don't get to a fund manager position at a business of that size without having the necessary relationships in the companies that they are heavily invested in. It's just the way it is.

Yeah, he'd be getting some internal talk from insiders, but doubtful he'd be getting numbers or anything, or if he is, those providing them are playing with fire and he'd being a bit reckless suggesting that he is as he could cop serious heat for insider trading.

As mentioned above, it seems he's more referring to share price looking at the sentences surrounding his quote.

 

[GHG]

Yeah, he'd be getting some internal talk from insiders, but doubtful he'd be getting numbers or anything, or if he is, those providing them are playing with fire and he'd being a bit reckless suggesting that he is as he could cop serious heat for insider trading.

Yeh he won't be getting any solid numbers, they are very careful to not ask for specifics (numbers wise) and to never do it in writing. Whatever information he has typically comes about as a result of informal conversations.

 

[Mr Moose]

Moving on to the suggestion from the report that, in 2021, Microsoft CEO Satya Nadella said that the company could “wind down its games business entirely”, the company flat out denies that. They point to comments made around that time with Nadella expressing that Microsoft is “all in on gaming”.

It happened in 2014, wouldn't surprise me if it happened again in 2021.

 

[Elios83]

The so called rebuttal in the article is nothing new, the usual spin.
They're just mentioning the obvious revenues growth the gaming division had including Activision and the unprecedented engagement with no numbers.
They're bothering to damage control because this came from financial press and not from a random gaming editorial.

The next fiscal report will be pretty telling, it's the first quarter when they won't have the Activision yoy boost and we'll see if they can share a new milestone for Gamepass.
Usually when numbers are bad Microsoft simply change the metrics they release so that things can still look good lol.

 

[adamsapple]

Yeah, he'd be getting some internal talk from insiders, but doubtful he'd be getting numbers or anything, or if he is, those providing them are playing with fire and he'd being a bit reckless suggesting that he is as he could cop serious heat for insider trading.

As mentioned above, it seems he's more referring to share price looking at the sentences surrounding his quote.

But everyone, including the original reporting websites, just ran with the middle sentence(s) without the surrounding context. Gotta get 'em clicks.

 

[lh032]

actisoft need sometime to spin it.

 

[damidu]

so its true then, got it

 

[GHG]

But everyone, including the original reporting websites, just ran with the middle sentence(s) without the surrounding context. Gotta get 'em clicks.

That's because the "surrounding context", is not new news. In particular the final sentence:

However, Microsoft’s heavy spending on data centers for AI is a bigger drag on its stock price than the Activision deal, Fish said.'

There have been rumblings of this in investing circles and on wall street for some time now:

If anyone is interested, word is that enterprise customers are starting to scoff at the price increases and some of Nvidia's business practices such as showing reluctance to sell anything other than fancy server racks.

We are embraking upon a tipping point on the enterprise side of things because what's keeping this gravy train going is FOMO - where all the AI competitors don't want to be left behind on the hardware side of things and fall behind those who have purchased the latest and greatest hardware. The biggest issue though - most of them are struggling to monetise (and come up with solutions for monetising) their AI solutions in a way that justifies the relentless continued cost of needing to stay "on cycle" from a hardware perspective.

So in summary, enterprise are being pushed to their limits as far as cost is concerned, as are regular consumers. The biggest issue everyone faces though is the fact that there's no meaningful alternative. So until that changes, Nvidia will continue to milk the situation for all it's worth.

The above applies to Nvidia's largest enterprise customers on the tech side - in particular the likes of Microsoft, Google and Meta.

 

[adamsapple]

That's because the "surrounding context", is not new news. In particular the final sentence:



There have been rumblings of this in investing circles and on wall street for some time now:



The above applies to Nvidia's largest enterprise customers on the tech side - Microsoft, Google and Meta

All hands on deck the AI train. The next 5 to 8 years are going to be revelatory in either the best or worst ways.

 

[GHG]

All hands on deck the AI train. The next 5 to 8 years are going to be revelatory in either the best or worst ways.

There's going to be a bust before an eventual tangible boom.

It's always the way with things that require a massive step change in order to fully realise the potential of something that is revolutionary but requires huge up front cost in order to even begin to take advantage of it.

We went through it at the beginning of the industrial revolution, we went through it when the Internet first started to become mainstream and we will go through it again with AI.

 

[DeepEnigma]

There's going to be a bust before an eventual tangible boom.

It's always the way with things that require a massive step change in order to fully realise the potential of something that is revolutionary but requires huge up front cost in order to even begin to take advantage of it.

We went through it at the beginning of the industrial revolution, we went through it when the Internet first started to become mainstream and we will go through it again with AI.

Yep. The dot com bust.

 

[Goalus]

This thread is more exciting than the Switch 2 reveal!

Being more exciting than the Switch 2 reveal isn't exactly an achievement.

 

[poppabk]

Even Taul Passi does not buy what MS is selling lol.

Where does he think those 240 million King game players came from?

 

[Mibu no ookami]

I wonder what it will take for them to be honest this time. With Game Pass, it was being under oath at the FTC trial, for example.

Once we start seeing a significant YoY decline in revenue of both hardware sales and content and services there is really nothing else to hide behind.

It's why we're likely to get Halo on PS5 this year. The question then becomes what do you do in 2026 to outperform GTA6 sales and Halo PS5 sales?

Basically they're buying time until they move to the next stage of their long term business plans, but eventually the revenue is going to go down but their hopes will be to improve operating income.

 

[Hero of Spielberg]

"Missing context"

What's your take on the context of this quote?

“[Activision] has been disappointing,” said Denny Fish, a Janus Henderson Investors portfolio manager who oversees two funds that included a total of more than $800 million in Microsoft stock as of November. “It’s also a business that had some degree of consistency over, like, a three- to five-year period but was highly volatile from year to year, because you’re so dependent on the big releases like Call of Duty.”

 

[Jaybe]

Xbox and Activision as separate companies was generating more revenue prior to the acquisition than the combined entity is making after the acquisition. MSFT keeps reporting the revenue as growth over the Xbox base, but that’s pretty easy to see through if you’re remotely financially literate.

 

[Beechos]

Ms playing 5d chess with everyone. The more they lose the less opposition they have for more acquisitions.

 

[James Sawyer Ford]

Well anyway, looks like that analyst missed the mark on this one.

EXCLUSIVE: Microsoft, Activision Deny Report Regarding Financial Performance

Microsoft and Activision have denied a recent report regarding the financial performance since the acquisition.

insider-gaming.com

And GamePass was always profitable because Phil said so

 

[vaibhavpisal]

Its disappointing from share holder / investor POV who expected something game changing after spending 70 billion.

Performance bump is within expectations for xbox / MS who consider gamepass to be additional service to traditional game purchases.

There is no need to spell doom and gloom on any console when all of them are performing bad.

 

[nowhat]

There is no need to spell doom and gloom on any console when all of them are performing bad.

Nintendo will Nintendo, so we'll leave them out of the equation.

But there's "performing bad", and then there's "basically not existing". I'll let you decide which camp is which.

 

[vaibhavpisal]

Nintendo will Nintendo, so we'll leave them out of the equation.

But there's "performing bad", and then there's "basically not existing". I'll let you decide which camp is which.

I hope anyone remembers “we still believe in generations”.

That was followed by 3 yrs of cross gen.

Looking at Switch 2 reveal, it’s reminding me of that strongly. New system is so similar, I wouldn’t be surprised if Nintendo was happy to cater to original Switch crowd for a few more years.

Only Phil Spencer told the truth back then.

 

[nowhat]

I hope anyone remembers “we still believe in generations”.

That was followed by 3 yrs of cross gen.

Looking at Switch 2 reveal, it’s reminding me of that strongly. New system is so similar, I wouldn’t be surprised if Nintendo was happy to cater to original Switch crowd for a few more years.

Only Phil Spencer told the truth back then.

Dafuq generations have to do with anything? Xbox basically doesn't exist outside the US. 12:1 sales in Europe last year between PS and Xbox. The only region where there's any traction is the US, and even there, it's failing hard.

 

[vaibhavpisal]

Dafuq generations have to do with anything? Xbox basically doesn't exist outside the US. 12:1 sales in Europe last year between PS and Xbox. The only region where there's any traction is the US, and even there, it's failing hard.

Thats how Xbox choose to operate.

If they want market share, nothing can stop them.

Certainly not Sony / Nintendo.

 

[onQ123]

Xbox and Activision as separate companies was generating more revenue prior to the acquisition than the combined entity is making after the acquisition. MSFT keeps reporting the revenue as growth over the Xbox base, but that’s pretty easy to see through if you’re remotely financially literate.

Post in thread 'Xbox will no longer have permanent console exclusives going forward according to Jez Corden' https://www.neogaf.com/threads/xbox...ccording-to-jez-corden.1678510/post-269916280

Tom Warren: Expect an Xbox Event in January

https://bsky.app/profile/tomwarren.co.uk/post/3ldj527vyws2k

www.neogaf.com

 

[nowhat]

If they want market share, nothing can stop them.

Soooo... they just choose not to have it?