OpenAI is a textbook example of having fun by burning cash. Nobody doubts it’s “cool.” Lots of people questioning if there’s an actual business there.
If Microsoft were just Windows, Teams, Azure, Bing and whatever it is, Microsoft would actually feel like a competitor for firms like Canonical or Red Hat or SUSE which happens to be big but nothing special relative to the others, whereas it now, with with this very public service feels like a behemoth.
Although I don’t particularly like their cloud services they are undeniably an important part of Microsoft’s business. (And they also own a large chunk of the gaming industry nowadays).
They’re shuttering half their studios, cancelling half their games, and firing game devs by the thousands as they hand halo over to PlayStation lol. You’re technically right but they clearly aren’t taking that part of their business seriously anymore. IIRC Gamepass has plateaued on subscribers for years now even prior to their very aggressive price hikes over the last 18 months.
I saw an article the other day that said Microsoft is telling developers they have to have a 30% return on their games, which is almost double the industry standard. That’s just absurd.
Edit: worth mentioning that you have people openly speculating at this point that they might not even make another Xbox. I’m not quite in that camp, but I also think it is a distinct possibility given the back slide they are clearly in right own when it comes to gaming. Fun fact: It’s been 4 console cycles, almost 25 years, since we saw a major player drop out.
I did hear the speculation about Xbox as well and I hope it's not true. I quite like the Xbox as a console (Series X was the first one I bought, used to be on PlayStation before that). Competition is good for the console space, and Nintendo and PlayStation aren't really competitors IMO. The audience for Switch and PS/Xbox isn't the same.
They kind of took it from Apple to begin with. We almost had Halo on the iMac before Microsoft acquired Bungie [1].
Suddenly Microsoft has gone from being some software to being everywhere. I know that Azure is huge, but you don't see Azure.
Windows competitors are OSX (and the very good Apple hardware), Linux (which thanks to Valve is gaining users at an increased rate).
Teams competes against Slack/Discord
Azure competes against AWS/GCP.
Bing "competes" against Google Search
While they do have a share of each (and a big share of the desktop) they don't really have anywhere they can grow, they've filled their existing niches and are competing with other equally sized companies in all of them.
So spaffing some cash on AI on the off chance it pays off down the line might look smart.
Hell if AI does pay off then they look good and if it doesn't, it'll look bad for everyone who invested and they can at least shrug off the cash hit.