Microsoft’s CEO admits the company is losing its grip on consumers, but is working to “win” them back. Satya Nadella made the eyebrow-raising comment in a Wednesday earnings call, saying: “When it comes to our consumer business, we are doing the foundational work required to win back fans and strengthen engagement across Windows, Xbox, Bing, and Edge.”
He added: “In the near term, we are focused on fundamentals, prioritizing quality and serving our core users better. You see this in the work underway across our consumer products.”
Nadella pointed to Microsoft’s recent effort to focus on performance and reliability improvements for future Windows 11 updates. He also mentioned Xbox, which is “recommitting to our core fans and players, and shaping the future of play” under new CEO Asha Sharma, who last week mentioned gamer dissatisfaction in a memo about a master plan for the console’s development.
Microsoft has championed AI in recent years, but the message has faced backlash from consumers over concerns that it has led to bloated, intrusive features in Windows. This has benefited competing OSes, especially with the arrival of Apple’s MacBook Neo and the growth of Valve’s SteamOS and other Linux distributions. Upgradable notebook maker Framework reported last week that its Ubuntu Laptop 13 Pro model was outselling the Windows versions.
Still, despite some of the negative perceptions around Windows, Nadella said in the call: “Monthly active Windows devices surpassed 1.6 billion, and over time Windows value will extend to deliver unmetered intelligence at the edge.”
He also talked at length about AI and Copilot during the earnings call, which covered its enterprise business and its developing AI agents. “We have seen a surge in usage of our first-party agents, with monthly active usage up 6x year-to-date,” he said. “Copilot queries per user were up nearly 20% quarter over quarter. To put this momentum in perspective, weekly engagement is now at the same level as Outlook, as more and more users make Copilot a habit.”
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