Microsoft could have saved a lot of time in its latest earnings call by quoting Dickens: "It was the best of times, it was the worst of times, it was the age of PC gaming... . is the PC dying?

We've heard this phrase before, but it was nevertheless part of the justification for Microsoft's significant 39% drop in Windows OEM sales in the most recent quarter. OEMs are companies that sell PCs with Windows installed, such as Dell and companies like HP. Since none of these companies have migrated to Linux in recent months, it is safe to say that this decline in Microsoft's revenues correlates to a significant drop in the number of PCs sold, and therefore a significant drop in cash coming in for all pre-installed copies of Windows. Microsoft blames this decline on "the continued weakness of the PC market and the comparably strong performance of the previous year."

A recent report from analyst firm Canalys confirms this, showing a 29% decline in PC shipments in the final quarter of 2022, down 16% from the booming year of 2021. Yet, to put that in perspective, PC shipments are still up a bit compared to 2019. Then it's just a flesh out.

Microsoft also blamed "execution challenges in new product launches" for the 39% drop in sales of PC devices like the Surface laptop. Given that Microsoft launched a large number of new Surface products in October, it is clear that they were not the expected holiday sales hits. And Microsoft expects this to get even worse in 2023, with Windows OEM sales expected to drop another 30% or more in the next quarter.

While this is all about the "worst of times," Microsoft also has some wise words about the "best of times" for PCs: as reported by The Verge, CEO Satya Nadella said on an earnings call that "Windows usage intensity is higher than before the pandemic. continued to be high, with a nearly 10% increase in hours of use per PC. "As The Verge points out, Phil Spencer has been talking about PCs recently as well, and at a Wall Street Journal Tech event in October, the key to the continued expansion of the gaming pass He pointed to the PC as a key to the continued expansion of the gaming path.

"We're seeing incredible growth on the PC... 130-140% year over year," Spencer said. 'And Spencer said. On consoles, we're seeing a slowdown in the growth of the game pass.

And then there's cloud: despite disappointing Windows, game, and device sales, a $27.1 billion revenue increase from Microsoft Cloud saved the quarter. No wonder Microsoft is turning up the heat on ChatGPT: Nadella said, "Microsoft Cloud is about to create the next big wave in computing by turning the world's most advanced AI model into a new computing platform." Sure, the cloud is all the rage now, but at some point it will be about PCs, and I look forward to 20 years from now when we all have Windows injected into our eyeballs or something and the headline will be "Is Cloud Computing Doomed?"

Microsoft's gaming revenue was down 13% overall this quarter, but Microsoft noted that the decline was "partially offset by growth in Xbox Game Pass subscriptions." The company also expects Game Pass to continue to grow, but not enough to overcome the projected "decline in monetization per hour in third- and first-party content." In other words, Microsoft does not expect to see huge games or particularly lucrative DLC roll out for existing games in the next three months. So, if you were hoping for a surprise release of "Starfield" by the end of March, please visit ...... It seems it's time to reconcile with our disappointment.