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.”
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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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Michael Kan
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I've been a journalist for over 15 years. I got my start as a schools and cities reporter in Kansas City and joined PCMag in 2017, where I cover satellite internet services, cybersecurity, PC hardware, and more. I'm currently based in San Francisco, but previously spent over five years in China, covering the country's technology sector.
Since 2020, I've covered the launch and explosive growth of SpaceX's Starlink satellite internet service, writing 600+ stories on availability and feature launches, but also the regulatory battles over the expansion of satellite constellations, fights with rival providers like AST SpaceMobile and Amazon, and the effort to expand into satellite-based mobile service. I've combed through FCC filings for the latest news and driven to remote corners of California to test Starlink's cellular service.
I also cover cyber threats, from ransomware gangs to the emergence of AI-based malware. In 2024 and 2025, the FTC forced Avast to pay consumers $16.5 million for secretly harvesting and selling their personal information to third-party clients, as revealed in my joint investigation with Motherboard.
I also cover the PC graphics card market. Pandemic-era shortages led me to camp out in front of a Best Buy to get an RTX 3000. I'm now following how the AI-driven memory shortage is impacting the entire consumer electronics market. I'm always eager to learn more, so please jump in the comments with feedback and send me tips.
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