I wrote for Naavik about Activision Blizzard’s recent earnings, regulatory twists in the Microsoft deal, uncertainty around Overwatch esports, and Blizzard’s decision to release games on Steam. Read the full article here.

Why I wrote about this

Sometimes you just have a writing slot and it’s a slow news week. Always a pleasure looking into Blizzard though.

The gist of it

Financials

Financially, Activision Blizzard had a strong quarter. Net bookings reached $2,207 million (+50% YoY) and operating income climbed to $583 million (+70% YoY), largely driven by Diablo IV. All three segments. Activision, Blizzard, and King, posted growth. However, monthly active users at Blizzard ticked down slightly.

The Microsoft deal

On the Microsoft acquisition, momentum clearly shifted toward closing. With Activision’s stock trading just a few dollars below the $95 offer price, markets are signaling confidence that the deal will ultimately close.

Troubled esports

Meanwhile, Blizzard’s esports strategy looks increasingly fragile. Overwatch League teams are being offered a $6 million termination fee at the end of the season, a notable concession given original franchise fees of $7.5–10 million plus ongoing costs. This follows months of tension and economic pressure from team owners, and further layoffs in the esports division don’t inspire confidence. Esports contributes less than 1% of Activision Blizzard’s total revenue, making it strategically expendable despite public commitments.

Overwatch 2 on Steam

Finally, Blizzard announced that Overwatch 2 will launch on Steam, ending its long-standing PC exclusivity on Battle.net. Steam commands over half of the PC download market, offering reach at the cost of margin. For a free-to-play, player-driven PvP title like Overwatch, scale matters. Still, the move signals either pragmatism or weakness, or both. With Microsoft set to take over, Battle.net’s long-term role is clearly up for reconsideration, especially if Xbox accounts and Game Pass become the center of gravity.

Key takeaways

  • Activision Blizzard posted excellent financial results, but declining active player count.
  • The Microsoft deal appears increasingly likely to close.
  • Overwatch League faces an uncertain future.
  • Releasing Overwatch 2 on Steam prioritizes player reach over platform control.
  • Under Microsoft, distribution (Steam vs. Battle.net vs. Game Pass) becomes a bigger question than ever before.