Activision Blizzard
Maker of Call of Duty, World of Warcraft, and Diablo; now a Microsoft subsidiary.
On the record
Checkpoint: Call of Duty: Modern Warfare 4 launches, testing recovery from Battlefield 6's win
The call
Activision Blizzard survives as part of Microsoft while Call of Duty loses ground to EA's Battlefield 6 and AI tools quietly reshape how its games get made.
Activision Blizzard makes popular video games like Call of Duty and World of Warcraft, owned by Microsoft since 2023. The company is shrinking while competitors like Electronic Arts grow, and its biggest franchise, Call of Duty, lost the top spot to a rival game called Battlefield 6 in 2025. Generative AI is also replacing some of the jobs that used to be done by people at the company. The one thing that could turn this around is whether a new Call of Duty game launching in late 2026 can win back players and revenue.
Why
01
AI pressure: Internal generative AI tools at King, Activision, and Blizzard. Generative AI already cut about 200 King roles via automated level design; Activision uses AI art while Blizzard restricts it internally. Could AI do the core job? Unlikely.
02
Bigger players: Electronic Arts (Battlefield 6). EA's Battlefield 6 outsold Call of Duty: Black Ops 7 in the US in 2025, ending Call of Duty's decade run at number one. Could a giant copy it? No, they are blocked.
03
What protects it. Microsoft's ownership guarantees survival, and owned franchises like WoW, Diablo, and Call of Duty plus Xbox distribution keep players locked in.
What would change this call
Call of Duty: Modern Warfare 4 launches Oct 23, 2026 and its US sales rank vs Battlefield 6. Shows whether Activision can retake the #1 shooter spot from EA or keeps losing share.
Microsoft Gaming segment revenue in FY2026 Q3/Q4 earnings reports. Shows whether the division's revenue decline is stabilizing or continuing to worsen.
Scope of the FY2027 second layoff wave (~1,600 roles) and whether Blizzard studios are included. Shows whether Blizzard remains protected or gets pulled into deeper cuts.
Microsoft Gaming segment revenue in FY2026 Q3/Q4 earnings reports. Shows whether the division's revenue decline is stabilizing or continuing to worsen.
Scope of the FY2027 second layoff wave (~1,600 roles) and whether Blizzard studios are included. Shows whether Blizzard remains protected or gets pulled into deeper cuts.
Key numbers
- Microsoft Gaming revenue fell 9% YoY to $5.99B
- Black Ops 7 fell to 5th in US 2025 sales chart
- Xbox cut 3,200 jobs, largest wave since 2023
Named risks
- Call of Duty franchise fatigue and share loss to Battlefield 6 continuing into Modern Warfare 4 (Oct 23, 2026).
- Second Xbox layoff wave (~1,600 roles) through FY2027 with Blizzard's exposure still undetermined.
- Union (CWA) legal and contractual action over July 2026 layoffs.
- Recurring legal and reputational fallout from pre-acquisition harassment scandal (EEOC, CRD, shareholder settlements).
- Gen-AI IP and copyright liability, e.g. Feb 2026 Black Ops 7 Studio Ghibli-style cosmetics controversy.
Rivals, as read in July 2026
| Rival | Direction | Evidence |
|---|---|---|
| Electronic Arts | losing to | Battlefield 6 outsold Black Ops 7 in US 2025, dropping CoD to 5th place, per Jan 2026 chart |
| Take-Two Interactive | losing to | Take-Two posted revenue growth while Microsoft Gaming fell 9% YoY as of Jan 2026 |
| Ubisoft | contesting | Ubisoft holds 15-year cloud-streaming rights to ABK catalog via 2023 UK regulatory settlement |
| Sony PlayStation | contesting | Console rival amid Xbox hardware revenue drop of 32% in FY2026 Q2 (Jan 2026) |
| Tencent | losing to | Tencent remains world's largest games publisher by revenue, ahead of Microsoft, per 2026 Xbox division overview |
Questions people ask
- Is Activision Blizzard still an independent public company?
- No. Activision Blizzard became a wholly owned Microsoft subsidiary on October 13, 2023 after a $68.7 billion to $75.4 billion, 21 month regulatory fight. It no longer trades publicly or reports standalone financials; its results are folded into Microsoft's Gaming segment.
- Could AI replace jobs at Activision Blizzard?
- It already has in part. King, maker of Candy Crush, cut roughly 200 developer roles in July 2025 after AI-driven playtesting automation reduced manual level-design tweaks by over 95%. Activision also uses Midjourney and Stable Diffusion for concept art, disclosed on Steam since February 2025.
- Who is Activision Blizzard's biggest competitor now?
- Electronic Arts. EA's Battlefield 6 outsold Call of Duty: Black Ops 7 in the US in 2025, pushing CoD to 5th place, its worst mainline finish since 2008, while EA and Take-Two both posted revenue growth as of June 24, 2026, versus Microsoft Gaming's 9% YoY decline.
- Is Activision Blizzard's revenue growing or shrinking?
- Shrinking as part of Microsoft's Gaming segment. Microsoft's Gaming revenue fell 9% YoY to $5.99 billion in FY2026 Q2 (ended December 31, 2025), driven partly by weak Call of Duty: Black Ops 7 sales and a 32% drop in Xbox hardware revenue.
- Did Call of Duty lose its top sales spot?
- Yes. Call of Duty: Black Ops 7, released November 14, 2025, finished only 5th on the US 2025 best-seller chart, losing the number one spot to EA's Battlefield 6, marking the weakest mainline CoD performance since 2008 per an IGN report dated January 23, 2026.
- What happened to Bobby Kotick after the Microsoft deal?
- Bobby Kotick, Activision Blizzard's CEO through the harassment scandal and acquisition, departed the company on December 29, 2023, about two and a half months after Microsoft's $68.7 billion to $75.4 billion acquisition closed on October 13, 2023.
Timeline
- 2026-07-09CWA union vows legal and contractual action over Xbox layoffs
- 2026-07-07Blizzard called 'comparatively minimal' cuts; FY2027 second wave exposure undetermined
- 2026-07-06Xbox announces 3,200 job cuts, divests Double Fine, Compulsion, Ninja Theory, Undead Labs
- 2026-05-23Microsoft pays $250M to settle Delaware shareholder lawsuit over acquisition
- 2026-04-28WoW: Midnight and Diablo IV: Lord of Hatred expansions released
- 2026-01-29Microsoft Gaming revenue falls 9% YoY to $5.99B; Xbox hardware down 32%
- 2026-01-23Black Ops 7 confirmed 5th in US 2025 chart, worst mainline CoD since 2008
- 2025-07-15King cuts ~200 developer roles tied to AI-driven automation
- 2025-02-25Activision confirms generative AI visuals in Call of Duty via Steam disclosure
- 2023-10-13Microsoft completes acquisition of Activision Blizzard
Revision history
23 July 2026
First assessed. Protection under test. The text above is fixed as of this date and is not edited afterwards.
In the same band
Sources
- Acquisition of Activision Blizzard by Microsoft (2026-05-30)
- Activision Blizzard (2026-07-15)
- Xbox struggles continue as console sales fall 32% (2026-01-29)
- 2025 U.S. Video Game Chart Rubber-Stamps Call of Duty: Black Ops 7 Sales Struggle (2026-01-23)
- The $69 Billion Hangover (2026-07-06)
- Blizzard Mostly Unaffected by Xbox Layoffs (2026-07-07)
- Not surprising at all, analysts see Xbox Game Pass price cut as inevitable shift (2026-04-22)
- Black Ops 7 is the Worst-Performing Game in the Series Since 2008 (2026-01-22)
- All Xbox studios remaining following mass layoffs and restructure (2026-07-07)
- wikipedia.org (Diablo IV) (2026-07-22)
- King's Candy Crush Saga hits $20bn in lifetime revenue (2023-09-27)
- Will Gaming Expansion Help Microsoft Anchor the Cloud Reach? (2026-06-24)