This Week in Business: Activision Blizzard’s Investor Relations Site and Microsoft’s Lack of Transparency
Introduction:
This Week in Business is our weekly recap column, providing stats, quotes, and analysis from recent stories in the gaming industry. In this entry, we discuss the finalized acquisition of Activision Blizzard by Microsoft and explore the impact it will have on Activision Blizzard’s investor relations website. We also delve into Microsoft’s lack of transparency in its gaming business. Additionally, we address the state of transparency in the games industry as a whole and highlight the cost of losing insights into industry operations. Lastly, we provide updates on previous articles, including a retraction of misleading testimony from Ron Curry, head of the Australian video games trade body Interactive Games and Entertainment Association (IGEA).
Microsoft’s Acquisition of Activision Blizzard and Its Impact on Investor Relations Website
Last week, Microsoft completed its acquisition of Activision Blizzard, a move that has raised concerns due to Microsoft’s historical abuse of its dominant position in the operating systems market. However, in this article, we focus on a smaller yet significant matter: the fate of Activision Blizzard’s investor relations website.
While Activision Blizzard has often faced criticism, its investor relations website has been commended for its rational layout, comprehensive financial information, and extensive archive of press releases dating back over two decades. The website demonstrates the company’s commitment to transparency and its recognition of the value of documenting its historical record.
However, with the acquisition by Microsoft, Activision Blizzard will no longer have the need for an investor relations website, as it will no longer have independent investors to relate to. This loss means losing access to important data on the company, including quarter-to-quarter results, revenue breakdown by division, and insights into the company’s business.
Microsoft’s Lack of Transparency in Gaming Business
Microsoft has a notorious track record of providing limited transparency in its gaming business. The company has gradually reduced the amount of information it shares, especially concerning hardware sales figures and Xbox Game Pass subscriber numbers. The lack of transparency is attributed to the gaming division’s relatively small size within Microsoft’s broader business portfolio.
For instance, in Microsoft’s recent quarterly earnings press release, the only mention of video games was a statement indicating a 5% increase in Xbox content and services revenue. The details provided during the earnings conference call were limited, with Chief Financial Officer Amy Hood simply stating that she expects Xbox content and revenue services to grow in the mid-to-high single digits.
Microsoft’s reduced transparency extends beyond gaming and is a trend observed across the games industry. Many formerly publicly-traded video game studios have been acquired, leaving only a few companies like Take-Two and Electronic Arts as American third-party publishers that provide mandated quarterly disclosures on their businesses.
The Loss of Industry Transparency and Insight
The consolidation and transformation of the games industry have led to a significant loss of transparency and insight into the specific activities and performance of various companies. Previously, earnings reports from companies like Midway, THQ, Atari, and Eidos provided valuable windows into different aspects of the industry, highlighting trends and challenges.
However, as companies have consolidated or gone private, these reports have vanished. The remaining industry reports, such as those from Microsoft and Activision Blizzard, have become less informative and often lack essential details.
Take the example of Zynga, a company that previously shared detailed information about its free-to-play models and player spending. Following its acquisition by Take-Two, Zynga’s investor relations site disappeared, and the valuable insights it provided into the industry were lost.
With increasing opacity and lack of transparency, the games industry is becoming less accountable and potentially shielded from scrutiny. This loss of transparency diminishes the understanding of the industry’s operations, including the competitive landscape and potential risks for consumers.
Update: Ron Curry’s Apology for Misleading Testimony on Gambling in the Games Industry
In previous articles, we highlighted misleading testimony provided by Ron Curry, head of IGEA, regarding the absence of gambling services and simulated gambling games within the gaming industry. Curry initially claimed that IGEA’s members had consciously avoided any involvement in gambling for the past 20 years.
However, Curry later retracted his statement and issued an apology, acknowledging that a small number of IGEA members or their affiliates do indeed produce simulated gambling games or include simulated gambling elements in their titles. While Curry’s apology is a step toward greater honesty and transparency, it underscores the need for accurate and informed testimony when addressing important industry issues.
Conclusion
The acquisition of Activision Blizzard by Microsoft raises concerns about the future of transparency in the games industry. Activision Blizzard’s investor relations website, known for its comprehensive financial information and historical record, might be lost due to Microsoft’s lack of emphasis on transparency in its gaming business.
Microsoft’s reduced transparency is reflective of a broader trend in the industry, as many formerly publicly-traded companies have been acquired, resulting in the loss of valuable industry insights. The lack of transparency poses challenges for stakeholders and consumers in understanding the industry’s operations and holding companies accountable for their actions.
Amidst these concerns, it is crucial for industry representatives to provide accurate and informed testimony, as demonstrated by Ron Curry’s apology for misleading statements. Greater transparency and accountability are necessary to ensure a fair and thriving gaming industry.
Key takeaways:
- Microsoft’s acquisition of Activision Blizzard raises concerns about transparency in the games industry.
- Activision Blizzard’s investor relations website might be discontinued, resulting in a loss of financial information and historical records.
- Microsoft’s lack of transparency in its gaming business is part of a broader trend in the industry.
- The consolidation of companies has reduced transparency and insight into the games industry as a whole.
- Ron Curry, head of IGEA, apologized for misleading testimony on gambling in the games industry.