Where Will Microsoft Put Activision Blizzard Revenues?

Microsoft’s acquisition of Activision Blizzard raises a question: will that unit’s earnings be reported as part of Microsoft’s “intelligent cloud” or “more personal computing” segments. 

source: Statista

By some estimates AWS had 32 percent share of the “computing as a service” market in early 2021, with Microsoft behind at 20 percent. 

source: Synergy Research Group 

“More Personal Computing” seems the likely reporting segment. 

The “Productivity and Business Processes” segment includes:

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Office Commercial (Office 365 subscriptions, the Office 365 portion of Microsoft 365 Commercial subscriptions, and Office licensed on-premises), comprising Office, Exchange, SharePoint, Microsoft Teams, Office 365 Security and Compliance, and Skype for Business.

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Office Consumer, including Microsoft 365 Consumer subscriptions and Office licensed on-premises, and Office Consumer Services, including Skype, Outlook.com, and OneDrive.

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LinkedIn, including Talent Solutions, Marketing Solutions, Premium Subscriptions, Sales Solutions, and Learning Solutions.

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Dynamics business solutions, including Dynamics 365, comprising a set of intelligent, cloud-based applications across ERP, CRM, Customer Insights, Power Apps, and Power Automate; and on-premises ERP and CRM applications.

The “Intelligent Cloud” segment includes:

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Server products and cloud services, including Azure; SQL Server, Windows Server, Visual Studio, System Center, and related Client Access Licenses (“CALs”); and GitHub.

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Enterprise Services, including Premier Support Services and Microsoft Consulting Services.

The “More Personal Computing” segment includes:

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Windows, including Windows OEM licensing and other non-volume licensing of the Windows operating system; Windows Commercial, comprising volume licensing of the Windows operating system, Windows cloud services, and other Windows commercial offerings; patent licensing; Windows Internet of Things; and MSN advertising.

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Devices, including Surface and PC accessories.

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Gaming, including Xbox hardware and Xbox content and services, comprising digital transactions, Xbox Game Pass and other subscriptions, video games, third-party video game royalties, cloud services, and advertising.

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