MS CFO Amy Hood Reveals High Expectations – Activision Must Immediately Increase Earnings
Microsoft CFO Amy Hood has added her testimony to the FTC federal case vs the Activision deal, and she has revealed the company’s high expectations for Team Xbox and this deal.
Amy Hood will appear in court earlier today. Yesterday, she filed her written testimony, which prepares us for what she will be talking about today.
As shared by The Verge editor Tom Warren, these are the pertinent points in Amy’s written testimony:
“Xbox has historically had a lower operating margin than Microsoft’s other lines of business. That is still true today. Microsoft’s operating margin is approximately 40 %, [REDACTED]. Over time, we are striving to increase Xbox’s operating marging to bring it closer to those of Microsoft’s other lines of business.
With approximately $ 16.23 billion in revenue in fiscal year 2022, Xbox is also a relatively small line of business within Microsoft, whose annual revenue for fiscal year 2022 was approximately $ 198.27 billion.
An essential component of that valuation was the [REDACTED] in forecasted total future sales of Activision’s content on all platforms, including continued sales of Call of Duty on Sony’s PlayStation.
The possibility of making Call of Duty exclusive to Xbox was never assessed or discussed with me, nor was it even mentioned in any of the presentations to or discussions with the Board of Directors. I understood the necessity of keeping Call of Duty on other platforms. The Acquisition’s strategic rationale and financial valuation are both aligned toward making Activision games more widely available, not less.
Another important component of the financial analysis was that the purchase had to be financially accretive to Microsoft’s shareholders in year one, meaning that the acquisition must
Read more on gameranx.com
