| Hi everyone. Today is the most pivotal day for Microsoft's Xbox since it purchased Activision Blizzard, but first... This week's top gaming news: Just over a year ago, Microsoft Corp. closed its deal to buy Activision Blizzard for $69 billion. This week, the tech giant will begin to discover if that whopping price tag was justified. Today marks the release of Call of Duty: Black Ops 6, the latest entry in a series of shooter games that have come out every fall like clockwork since 2005 (even when the developers are under the impression that they're instead making an expansion). Call of Duty is one of the most lucrative video-game franchises of all time, consistently topping the charts and generating more than $30 billion in revenue since its inception. But this release will feel different in a monumental way. Call of Duty: Black Ops 6 is the first entry in the series to have a day-one launch on Xbox Game Pass, Microsoft's subscription service, which is often described as "Netflix for video games." For between $10 and $20 a month (depending on the tier), players get access to a catalog of hundreds of games that they would otherwise have to buy individually. Xbox puts all of its new releases on the subscription service, a list that, thanks to the acquisition, now includes Call of Duty. In other words, people can pay $20 or less to sign up for Xbox Game Pass and access the new Call of Duty rather than spending $70 to buy the game outright. Microsoft hopes that any potential sales losses from this strategy will be alleviated by Game Pass signups, and the company is expecting a huge day for the subscription service. "Call of Duty to Game Pass day 1 is, of course, the Big Bet, and what the last few years have all been leading to," Mat Piscatella, an analyst with Circana, told me in an email this week. Game Pass has been the centerpiece of Xbox's strategy for years, driving the company to make huge bets on Activision Blizzard and other purchases both big and small. But its subscriber count peaked in 2021 following the Covid-19 boom and has remained flat since then. As of August, video-game subscription spending in 2024 was only 1% higher than for the same period last year, Piscatella said. "We have not seen growth in the video game subscription space that many had predicted," he added. Today will be the first test of Xbox's ability to reverse that trend, although the strategy comes with some big questions. Will the Game Pass release lead to softer sales? Will fans sign up for Game Pass just to get the new Call of Duty but unsubscribe in December when they're done playing it? Will the never-ending multiplayer modes keep them in Microsoft's ecosystem for the long haul? Some analysts expect the new Call of Duty to lead to a significant boost in Game Pass subscribers. Piscatella, for his part, said there are too many variables to make concrete predictions. "I'm not expecting a seismic shift in where things stand being driven from the release of Call of Duty on Game Pass," he said. "However, if I'm completely wrong on that I also won't be surprised." The new Call of Duty release comes at a tumultuous time for Microsoft's gaming unit, which has been slashing costs all year due to overall flat growth. Xbox has laid off thousands, shuttered studios and canceled projects. All that cost-cutting is largely the result of pressure from Microsoft's higher-ups, Bloomberg has reported, and that pressure is largely due to a certain $69 billion expenditure. It's not clear what Xbox will view as a success for this release. The company did not respond to requests for comment. So it may still be a while before we can gauge whether Activision Blizzard was worth that gargantuan cost. But one thing is for sure: It's all been leading up to this day. I'm not a Call of Duty person (and I'll be spending the weekend playing a different game that I'll tell you more about next week). But Black Ops 6 is receiving strong reviews so far. IGN called the story portion "the best Call of Duty campaign in many, many years." | 
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