Microsoft takes advantage of cloud computing
Microsoft beat market expectations on Jan. 25 with strong quarterly performance in cloud computing and software, still benefiting from the pandemic shifting work, play, shopping and learning online.
The American tech colossus, which last week announced a blockbuster deal to buy gaming giant Activision Blizzard, said its profits jumped to $18.8 billion in the last three months of the year. last.
“Digital technology is the most malleable resource available to the world to overcome constraints and reinvent everyday work and life,” said CEO Satya Nadella, announcing revenue of 51.7 billions of dollars.
Microsoft’s investments include pumping money into the booming video game market and, by extension, the Metaverse, virtual reality’s vision for the future of the internet.
During an earnings call, Nadella pointed to the tens of millions of people playing games such as Forza, Halo and Minecraft, many of whom invest in “avatar” proxies for online worlds, saying the metaverse is a natural extension.
Microsoft is also integrating virtual collection components with non-gaming offerings, such as online collaboration software Teams, according to executives.
“We feel very well positioned to be able to capture what I think is essentially the next wave of the internet,” Nadella said on the call.
The Redmond, Wash.-based technology company last week announced a landmark deal to buy outrageous “Call of Duty” maker Activision for $69 billion.
It would be Microsoft’s biggest takeover ever, well ahead of LinkedIn in 2016 for $26.2 billion.
The career-focused social network’s revenue increased 37% from the same quarter a year earlier, according to the earnings report.
The struggling but highly successful acquisition of Activision will make Microsoft the third-largest games company by revenue, behind Tencent and Sony, Microsoft said.
The proposed merger must receive regulatory approval at a time when Europe and the United States seek to rein in Big Tech.
According to the earnings report, revenue for the Microsoft division, which makes Xbox consoles and video game content, increased 10% in the last quarter.
Microsoft competes with Amazon and Google in the cloud computing market.
The cloud services units at Microsoft each saw double-digit revenue growth, bringing in tens of billions of dollars, according to the earnings report.
Microsoft’s Windows operating system division also thrived on what Nadella called a “renaissance” of the personal computer (PC) market that had withered before the pandemic forced many around the world to stay at home.
“We are experiencing a PC renaissance with an increase in time spent on PCs and PCs per household.”
Nadella expected digital technology to remain a valuable resource as people and businesses “reimagine” life and society seek solutions to challenges such as labor shortages.
“We are going through a generational shift in our economy and our society,” Nadella said.
Beating analysts’ forecasts was not enough to prevent Microsoft shares from first falling and then rising about 2% in after-hours trading on a choppy day for investors. As markets swing between big gains and losses, expensive stocks of high-flying tech companies have led to losses as investors fret about rising interest rates.