Microsoft is Reportedly Funding Xbox with Revenue from Activision Blizzard

As Xbox undergoes a major restructuring in 2026, new allegations have surfaced regarding the company’s financial model. According to information reported by Windows Central writer Jez Corden, Microsoft was using Activision Blizzard revenue to support some of the weakening areas of the Xbox brand. However, the disappointing year for the Call of Duty: Black Ops series, particularly with the release of Black Ops 7, disrupted this balance, making the problems facing Xbox more visible.

XBOX Game Pass Model Under Pressure Due to Call of Duty

According to the report, the inclusion of Call of Duty games in the Xbox Game Pass system did not fully generate the expected impact. As a significant portion of players opted for subscriptions rather than high-priced direct purchases, traditional sales revenue declined. Simultaneously, Game Pass’s inability to grow strongly enough to offset this loss led to internal pressure on the model.

This situation has become a bigger problem for Xbox’s overall revenue structure. The report states that Xbox Game Pass revenue is used as a significant source to support different divisions of the company. However, due to hardware issues, it has become difficult to gain more subscribers through new console sales. Thus, the expected balance between game sales and subscription growth appears to have failed.

It is stated that Microsoft has begun to reshape its Xbox strategy in response to this situation. Positioning some major games, such as Gears of War: E-Day, as console exclusives shows that the company is trying to increase the platform’s value again. Despite this, the biggest titles are expected to continue to be included in Xbox Game Pass. This reveals that Microsoft is trying to strike a delicate balance between maintaining the subscription system and increasing direct sales revenue.

The report also mentions that different solutions for Game Pass are being discussed. Possible options include removing some major games from the subscription system and giving more weight to direct sales revenue, or creating a new, more expensive premium tier. Big brands like Call of Duty, World of Warcraft, or Forza Horizon could be at the center of these discussions. For Xbox, the real issue will no longer be just owning big games, but establishing the right model to generate sustainable revenue from those games.

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