To succeed financially, Xbox must make more games available on more platforms. To improve its financial performance, Xbox has been seeking to move away from being tied to exclusive hardware (Xbox consoles) towards wider distribution of its software (games). Minecraft, a multi-platform game that Microsoft acquired in 2014, is the perfect example of this strategy. Minecraft is available on every console, on PCs, and on iOS and Android phones.

As a key component of its multi-platform strategy, Xbox and Microsoft leadership have been looking for opportunities to expand into the mobile gaming and PC gaming markets. The potential acquisition of Zynga Inc., a mobile game developer, was one such opportunity that we looked at very closely just prior to the acquisition of Activision Blizzard Inc. The strategic rationale for the Acquisition was Activision's presence across multiple platforms, particularly on mobile.

During our first session with the Board on December 8, 2021, we briefed the Board on the gaming industry's landscape, including the fact that $113 billion of the game industry's total revenues of $210 billion came from mobile gaming in 2020, and that Microsoft is smaller in terms of reported revenue than Tencent, Sony, Google (Alphabet), Nintendo, and Apple. We detailed our goal of increasing Xbox revenue from mobile transactions and generally expanding Xbox's presence on mobile and PC platforms.

We also briefed the Board on Activision Blizzard's key assets across differentiated platforms: Activision's Call of Duty console and mobile franchises; Blizzard's PC games, like Diablo and World of Warcraft; and King's mobile game Candy Crush. Activision's PC and mobile assets in Blizzard and King generate more revenue and more than double the monthly average users than Activision's console gaming assets.