(Alliance News) - Microsoft Corp's high-profile acquisition of Activision Blizzard Inc adds another string to its bow as it seeks to cement its position in the gaming realm, according to Hargreaves Lansdown on Wednesday.
Microsoft late Tuesday hailed cloud strength as the software maker reported robust second quarter growth.
The stock was up 5.5% in pre-market trade in New York on Wednesday.
Revenue for the three months to December 31 jumped 20% to USD51.73 billion from USD43.08 billion year-on-year, with the firm noting revenue in Intelligent Cloud of USD18.3 billion was up 26%.
Net income for the quarter grew 21% to USD18.77 billion from USD15.46 billion, and diluted earnings per share rose 22% to USD2.48 from USD2.03, easily topping consensus of USD2.31.
The Windows software provider's results come a week after it unveiled a bumper USD68.7 billion deal to buy beleaguered gaming firm Activision Blizzard in a bid to take on Sony Group and the PlayStation 5.
Microsoft, which also makes Xbox gaming consoles, agreed to buy shares in Activision for USD95.00 each in an all-cash deal. The transaction will add titles such as 'Call of Duty', 'Candy Crush' and 'World of Warcraft' to Microsoft's portfolio.
The Redmond, Washington-based firm is seeking to expand its presence in gaming via its video game subscription services Xbox Game Pass amid rumours that Sony is readying to announce its own rival offering, though nothing yet has been officially confirmed yet.
Xbox Game Pass has around 25 million subscribers, as Microsoft continues to acquire studios to boost the subscription service.
Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: "Microsoft isn't afraid to put its hand in its pockets when necessary. The pending acquisition of Activision Blizzard would allow Microsoft to beef up its existing gaming products, especially in the lucrative subscription-based Game Pass. I tend to think of Microsoft as the nice guy of tech, but snatching up some of the world's most valuable intellectual property in this way proves it's far more than just a pretty face.
"It's refreshing to see a tech giant putting their enormous cash hoards to some tangible use. Luckily for Microsoft, Xbox revenues seem to be holding their own - padding out the nest for Call of Duty to land."
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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