The Santa Monica, Calif.-based company posted $280 million in net income for the three months ended June 30, down from $876 million in the same period a year earlier. Analysts polled by FactSet expected $410.6 million.

Stripped of certain items such as expenses related to share-based compensation, adjusted earnings were 48 cents a share, down from $1.20 a share in the year-ago period, matching analysts’ expectations.

A deal between Microsoft and Activision would continue the software company’s ascent as a powerhouse in business computing and a rising giant in videogames under Microsoft Chief Executive

Satya Nadella’s

leadership. Microsoft rushed into a deal after The Wall Street Journal reported that Activision CEO

Bobby Kotick

knew about allegations of employee misconduct at the company but didn’t brief the board.

Activision has said the Journal’s reporting created a misleading picture of the company. Mr. Kotick has said he is transparent with his board, which issued a statement supporting him.

Mr. Kotick, who is expected to leave after the acquisition is complete, could walk away with as much as $520 million. The deal is expected to close in mid-2023.

Another major development at Activision has taken place in recent months: In May, a small number of workers at one of Activision’s studios voted in favor of unionizing with the Communications Workers of America, a first for a major U.S. videogame publisher.

A sense of how the broader videogame market is faring will become clearer on Tuesday with results from the latest quarter from competitor

Electronic Arts Inc.

Write to Denny Jacob at denny.jacob@wsj.com