Microsoft plans a major shakeup of its videogame sales strategy by releasing the coming installment of Call of Duty to its subscription service instead of the longtime, lucrative approach of only selling it a la carte. WSJ: The plans, which mark the biggest change to Microsoft's gaming division since it closed the $75 billion takeover of Activision Blizzard, are expected to be announced at the company's annual Xbox showcase next month, according to people familiar with the matter. Call of Duty is one of the most successful entertainment properties ever, generating over $30 billion in lifetime revenue. Activision, which makes it, has long released new editions annually, selling about 25 million copies on average, selling for around $70 each in recent years. Before the Microsoft deal last year, Activision was reluctant to fully embrace subscription-based models for a game that still attracts a premium price. Microsoft's subscription service, Game Pass, costs $9.99 to $16.99 a month, and provides access to hundreds of games from Microsoft and dozens of other companies.

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In an op-ed on Windows Central, the site's co-managing editor Jez Corden laments Microsoft's "short-sighted" decision-making and "inconsistent" investment in its products and services, which he argues has led to a loss of trust among customers and missed opportunities in the tech industry. Despite Microsoft's advancements in AI and cloud computing, the company has made "baffling" decisions such as shutting down Windows Phone, under-investing in Xbox, and canceling promising Surface products. The author argues that Microsoft's lack of commitment to security, customer support, and long-term quality has "damaged" its reputation and hindered its potential for growth. Examples include recent hacking scandals, poor customer service experiences, and the aggressive promotion of Microsoft Edge at the expense of user choice. The author also expresses concern over Microsoft's handling of the Xbox brand, particularly the decision to release exclusive games on PlayStation, which could undermine the reasons for customers to choose Xbox. The op-ed concludes that while Microsoft has the potential to be a leader in the tech industry, its pattern of short-sighted decisions and failure to learn from past mistakes has led to a growing sense of doubt among its customers and observers.

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Microsoft is asking hundreds of employees in its China-based cloud-computing and AI operations to consider transferring outside the country, as tensions between Washington and Beijing mount around the critical technology. WSJ: Such staff, mostly engineers with Chinese nationality, were recently offered the opportunity to transfer to countries including the U.S., Ireland, Australia and New Zealand, people familiar with the matter said. The company is asking about 700 to 800 people [non-paywalled link], who are involved in machine learning and other work related to cloud computing, one of the people said.ÂThe move by one of America's biggest cloud-computing and AI companies comes as the Biden administration seeks to put tighter curbs around China's capability to develop state-of-the-art AI. The White House is considering new rules that would require Microsoft and other U.S. cloud-computing companies to get licenses before giving Chinese customers access to AI chips.

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Microsoft's ambitious goal to be carbon negative by 2030 is threatened by its expanding AI operations, which have increased its carbon footprint by 30% since 2020. To meet its targets, Microsoft must quickly adopt green technologies and improve efficiency in its data centers, which are critical for AI but heavily reliant on carbon-intensive resources. Bloomberg reports: Now to meet its goals, the software giant will have to make serious progress very quickly in gaining access to green steel and concrete and less carbon-intensive chips, said Brad Smith, president of Microsoft, in an exclusive interview with Bloomberg Green. "In 2020, we unveiled what we called our carbon moonshot. That was before the explosion in artificial intelligence," he said. "So in many ways the moon is five times as far away as it was in 2020, if you just think of our own forecast for the expansion of AI and its electrical needs." [...] Despite AI's ravenous energy consumption, this actually contributes little to Microsoft's hike in emissions -- at least on paper. That's because the company says in its sustainability report that it's 100% powered by renewables. Companies use a range of mechanisms to make such claims, which vary widely in terms of credibility. Some firms enter into long-term power purchase agreements (PPAs) with renewable developers, where they shoulder some of a new energy plant's risk and help get new solar and wind farms online. In other cases, companies buy renewable energy credits (RECs) to claim they're using green power, but these inexpensive credits do little to spur new demand for green energy, researchers have consistently found. Microsoft uses a mix of both approaches. On one hand, it's one of the biggest corporate participants in power purchase agreements, according to BloombergNEF, which tracks these deals. But it's also a huge purchaser of RECs, using these instruments to claim about half of its energy use is clean, according to its environmental filings in 2022. By using a large quantity of RECs, Microsoft is essentially masking an even larger growth in emissions. "It is Microsoft's plan to phase out the use of unbundled RECs in future years," a spokesperson for the company said. "We are focused on PPAs as a primary strategy." So what else can be done? Smith, along with Microsoft's Chief Sustainability Officer Melanie Nakagawa, has laid out clear steps in the sustainability report. High among them is to increase efficiency, which is to use the same amount of energy or computing to do more work. That could help reduce the need for data centers, which will reduce emissions and electricity use. On most things, "our climate goals require that we spend money," said Smith. "But efficiency gains will actually enable us to save money." Microsoft has also been at the forefront of buying sustainable aviation fuels that has helped reduce some of its emissions from business travel. The company also wants to partner with those who will "accelerate breakthroughs" to make greener steel, concrete and fuels. Those technologies are starting to work at a small scale, but remain far from being available in commercial quantities even if expensive. Cheap renewable power has helped make Microsoft's climate journey easier. But the tech giant's electricity consumption last year rivaled that of a small European country -- beating Slovenia easily. Smith said that one of the biggest bottlenecks for it to keep getting access to green power is the lack of transmission lines from where the power is generated to the data centers. That's why Microsoft says it's going to increase lobbying efforts to get governments to speed up building the grid. If Microsoft's emissions remain high going into 2030, Smith said the company may consider bulk purchases of carbon removal credits, even though it's not "the desired course." "You've got to be willing to invest and pay for it," said Smith. Climate change is "a problem that humanity created and that humanity can solve."

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Melinda French Gates announced today she is stepping down from the Bill and Melinda Gates Foundation, three years after announcing her separation from Microsoft co-founder Bill Gates. With her departure as co-chair, the foundation will change its name to Gates Foundation and Bill Gates will be its sole chairperson, said CEO Mark Suzman. NBC News reports: In a statement posted on her Instagram account, she said that as part of her agreement to step down from the foundation, she will retain $12.5 billion that she plans to put toward her ongoing work supporting women and families. "This is not a decision I came to lightly," French Gates wrote. "I am immensely proud of the foundation that Bill and I built together and of the extraordinary work it is doing to address inequities around the world." In a separate statement, Bill Gates said, "I am sorry to see Melinda leave, but I am sure she will have a huge impact in her future philanthropic work." Now worth $75.2 billion, the Gates Foundation has over the course of its three-decade lifespan made $77.6 billion worth of grant payments, making it one of the largest donor organizations in the world, with a focus on health and developmental goals. It is one of the largest contributors to the World Health Organization, and played a key role in efforts to address the Covid pandemic. "After a difficult few years watching women's rights rolled back in the U.S. and around the world, she wants to use this next chapter to focus specifically on altering that trajectory," Suzman said of French Gates. "I want to reassure you that the millions of people our work serves and the thousands of partners we work alongside can continue to count on the foundation. The foundation today is stronger than it has ever been." "I know we all wish Melinda the best in her next chapter," he added, noting that French Gates "will not be bringing any of the foundation's work with her when she leaves."

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An anonymous reader shares a report: Microsoft is attempting to solve the hassle of coordinating with colleagues on when everyone will be in the office. It's a problem that emerged with the increase in hybrid and flexible work after the recent covid-19 pandemic, with workers spending less time in the office. Microsoft Places is an AI-powered app that goes into preview today and should help businesses that rely on Outlook and Microsoft Teams to better coordinate in-office time together. "When employees get to the office, they don't want to be greeted by a sea of empty desks -- they want face-time with their manager and the coworkers they collaborate with most frequently," says Microsoft's corporate vice president of AI at work, Jared Spataro, in a blog post. "With Places, you can more easily coordinate across coworkers and spaces in the office."

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An anonymous reader shares a report: The default pasting behavior of Microsoft Word is a nightmare, and has been forever. If you want to add a text or image using the standard option, you can easily mess up the entire formatting in the text if a completely different font suddenly appears. After many years of complaints, Microsoft is finally listening to user feedback and changing the default behavior when pasting in Word. From now on, the source's formatting will no longer be automatically retained. Instead, "Merge formatting" will be the new default for everyone, as Microsoft explained in a blog post this week. This means that after the update, newly pasted text will take on the font size, font type, and color of the text written in Word. However, special features such as lists or italicized elements will be retained. If you want these elements to be automatically adapted to the Word text, you must select the option "Keep text only."

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The European Commission is set to issue new antitrust charges [non-paywalled link] against Microsoft over concerns that the tech giant is undermining competitors to its videoconferencing app Teams, according to FT. The move comes after Microsoft offered concessions last month, including a global plan to unbundle Teams from other software such as Office, in an attempt to avoid regulatory action. The EU officials remain concerned that the company's efforts do not sufficiently ensure fairness in the market, the newspaper said. Rivals worry that Microsoft will make Teams run more compatibly with its own software compared to competitor apps, and that the lack of data portability makes it difficult for existing Teams users to switch to alternatives. The case, which originated from a formal complaint submitted by Slack (now owned by Salesforce) in 2020, is now escalating with the Commission's impending formal charge sheet against Microsoft.

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The non-profit environmental site Grist reports on "an internal, employee-led effort to raise ethical concerns about Microsoft's work helping oil and gas producers boost their profits by providing them with cloud computing resources and AI software tools." There's been some disappointments — but also some successes, starting with the founding of an internal sustainability group within Microsoft that grew to nearly 10,000 employees: Former Microsoft employees and sources familiar with tech industry advocacy say that, broadly speaking, employee pressure has had an enormous impact on sustainability at Microsoft, encouraging it to announce industry-leading climate goals in 2020 and support key federal climate policies. But convincing the world's most valuable company to forgo lucrative oil industry contracts proved far more difficult... Over the past seven years, Microsoft has announced dozens of new deals with oil and gas producers and oil field services companies, many explicitly aimed at unlocking new reserves, increasing production, and driving up oil industry profits... As concerns over the company's fossil fuel work mounted, Microsoft was gearing up to make a big sustainability announcement. In January 2020, the company pledged to become "carbon negative" by 2030, meaning that in 10 years, the tech giant would pull more carbon out of the air than it emitted on an annual basis... For nearly two years, employees watched and waited. Following its carbon negative announcement, Microsoft quickly expanded its internal carbon tax, which charges the company's business groups a fee for the carbon they emit via electricity use, employee travel, and more. It also invested in new technologies like direct air capture and purchased carbon removal contracts from dozens of projects worldwide. But Microsoft's work with the oil industry continued unabated, with the company announcing a slew of new partnerships in 2020 and 2021 aimed at cutting fossil fuel producers' costs and boosting production. The last straw for one technical account manager was a 2023 LinkedIn post by a Microsoft technical architect about the company's work on oil and gas industry automation. The post said Microsoft's cloud service was "unlocking previously inaccessible reserves" for the fossil fuel industry, promising that with Microsoft's Azure service, "the future of oil and gas exploration and production is brighter than ever." The technical account manager resigned from the position they'd held for nearly a decade, citing the blog post in a resignation letter which accused Microsoft of "extending the age of fossil fuels, and enabling untold emissions." Thanks to Slashdot reader joshuark for sharing the news.

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The sudden closure of several video-game studios at Microsoft's Xbox division was the result of a widespread cost-cutting initiative that still isn't finished. From a report: This week, Xbox began offering voluntary severance agreements to producers, quality assurance testers and other staff at ZeniMax, which it purchased in 2020 for $7.5 billion, according to people familiar with the company's plans. Others across the Xbox organization have been told that more cuts are on the way. Employees were shocked by the unexpected shuttering Tuesday of three Xbox subsidiaries and the absorption of a fourth. The closures included Tokyo-based Tango Gameworks, which last year released the critically acclaimed action game Hi-Fi Rush. Tango was in the process of pitching a sequel, said the people, who asked not to be identified discussing nonpublic information. During a town hall with ZeniMax staff on Wednesday morning, Xbox president Matt Booty praised Hi-Fi Rush but did not specify why the company had shut down the development studio behind it, according to three people who were in attendance. Speaking about the closures more broadly, Booty said that the company's studios had been spread too thin -- like "peanut butter on bread" -- and that leaders across the division had felt understaffed. They decided to close these studios to free up resources elsewhere, he said. Booty added that the shutdown of subsidiary Arkane Austin, the longtime developer of games such as Prey, was not connected to the performance of its new multiplayer game, Redfall, a critical and commercial flop.

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The Register provides a retrospective look at how Microsoft "absorbed the handset division of Nokia" ten years ago, only to kill the unit two years later and write it off as a tax loss. What went wrong? "It was a fatal combination of bad management, a market evolving in ways hidebound people didn't predict, and some really (with a few superb exceptions) terrible products," reports The Register. From the report: Like Nokia, Windows Mobile's popularity peaked in 2007, then started to drop away. The iPhone was the tech item of choice for fashionistas, Blackberry was seen as essential for serious business, and Android -- with Google as its new owner -- was gaining traction. Microsoft by that time had a new CEO in Steve Ballmer, who completely and famously failed to see the shifting sands in the mobile market. He dismissed the iPhone as a threat to what he thought was Windows Mobile's unassailable market position, and was roundly mocked for it. So the scene was set for a mobile standards war, and Steve Ballmer staked his professional pride on winning it. Microsoft recruited Nokia to help out. [...] Under [Executive VP of Microsoft Stephen Elop's] leadership, a closer working relationship with Microsoft was a given -- but in 2013 Redmond announced it was going the whole hog and buying Nokia's handset business outright for $7.2 billion. The deal was done in April 2014, a decade ago from today. Microsoft also got a ten-year license on Nokia's patents and the option to renew in perpetuity. It also got Elop back, as executive vice president of the Microsoft Devices Group. That meant stepping down as CEO of Nokia, for which he trousered an 18.8 million bonus package -- a payoff the Finnish prime minister at the time called "outrageous." Nokia retained its networking business in Finland. It purchased Siemens' half of the Nokia Siemens Networks joint venture and renamed in Nokia Networks. The Nokia board rolled the dice again on hiring another non-Suomi manager, Rajeev Suri, and this time hit a double D20 in D&D terms. When Ballmer stepped down from the helm at Microsoft in 2014 -- shortly before the Nokia deal completion -- he left a hot mess to deal with. His plan had been to develop the mobile operating system in conjunction with Windows 10, and Windows Mobile 10 was supposed to be a part of a unified code environment. While Windows 10 on the desktop wasn't a bad operating system, Windows Mobile 10 really was. The promised synergy just didn't happen -- it was power-hungry, clunky, and about as popular as a rattlesnake in a pinata. It was this mess that Satya Nadella faced when he took over the reins. Nadella was never very keen on the phone platform and spent more time in press conferences talking about cricket or the cloud than Microsoft's mobile ambitions. It was clear to all that this really wasn't working. Elop was laid off by Redmond a year later. It was clear that Windows Mobile wasn't going to work. Android and iOS were drinking Microsoft's milkshake, and Redmond realized the game was up. Microsoft started shedding mobile jobs -- both in Finland and Redmond. While mobile was still publicly touted as the way forward for Microsoft with Ballmer gone, the impetus wasn't there and support for the mobile OS shriveled. In 2015 Microsoft declared it was writing off $7.6 billion on the Phone Hardware division as "goodwill and asset impairment charges" -- $400 million more than it had originally paid for the Finnish firm. Nokia bought European networking giant Alcatel-Lucent in a $16.7 billion deal in 2015. Around the same time, Suri announced a move into tablets, since it had a non-compete agreement with Microsoft on mobiles. Meanwhile a bunch of former Nokia execs who'd fled Elop and Microsoft had started a mobile biz of their own: HMD. It was Finnish, but outsourced production to Foxconn in China, and was planning to make cheapish Android devices. In 2016 Microsoft sold its mobile hardware arm to HMD for an undisclosed -- but probably not large -- sum. Nadella clearly wanted out of the whole business and the Finnish startup concentrated on selling good-enough Android smartphones to Nokia's traditional cheap markets.

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For the first time since it invested more than $10 billion into OpenAI in exchange for the rights to reuse the startup's AI models, Microsoft is training a new, in-house AI model large enough to compete with state-of-the-art models from Google, Anthropic and OpenAI itself. The Information: The new model, internally referred to as MAI-1, is being overseen by Mustafa Suleyman, the ex-Google AI leader who most recently served as CEO of the AI startup Inflection before Microsoft hired the majority of the startup's staff and paid $650 million for the rights to its intellectual property in March. But this is a Microsoft model, not one carried over from Inflection, although it may build on training data and other tech from the startup. It is separate from the Pi models that Inflection previously released, according to two Microsoft employees with knowledge of the effort. MAI-1 will be far larger than any of the smaller, open source models that Microsoft has previously trained, meaning it will require more computing power and training data and will therefore be more expensive, according to the people. MAI-1 will have roughly 500 billion parameters, or settings that can be adjusted to determine what models learn during training. By comparison, OpenAI's GPT-4 has more than 1 trillion parameters, while smaller open source models released by firms like Meta Platforms and Mistral have 70 billion parameters. That means Microsoft is now pursuing a dual trajectory of sorts in AI, aiming to develop both "small language models" that are inexpensive to build into apps and that could run on mobile devices, alongside larger, state-of-the-art AI models.

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From the Washington Post's "Technology 202" newsletter: As tech giants move toward a world in which chatbots supplement, and perhaps supplant, search engines, the Microsoft executive assigned to make sure AI is used responsibly said the industry has to be careful not to break the business model of the wider web. Search engines citing and linking to the websites they draw from is "part of the core bargain of search," [Microsoft's chief Responsible AI officer] said in an interview Monday.... "It's really important to maintain a healthy information ecosystem and recognize it is an ecosystem. And so part of what I will continue to guide our Microsoft teams toward is making sure that we are citing back to the core webpages from which the content is sourced. Making sure that we've got that feedback loop happening. Because that is part of the core bargain of search, right? And I think it's critical to make sure that we are both providing users with new engaging ways to interact, to explore new ideas — but also making sure that we are building and supporting the great work of our creators." Asked about lawsuits alleging copyright use without permission, they said "We believe that there are strong grounds under existing laws to train models." But they also added those lawsuits are "asking legitimate questions" about where the boundaries are, "for which the courts will provide answers in due course."

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Microsoft is making security its number one priority for every employee, following years of security issues and mounting criticisms. The Verge: After a scathing report from the US Cyber Safety Review Board recently concluded that "Microsoft's security culture was inadequate and requires an overhaul," it's doing just that by outlining a set of security principles and goals that are tied to compensation packages for Microsoft's senior leadership team. Last November, Microsoft announced a Secure Future Initiative (SFI) in response to mounting pressure on the company to respond to attacks that allowed Chinese hackers to breach US government email accounts. Just days after announcing this initiative, Russian hackers managed to breach Microsoft's defenses and spy on the email accounts of some members of Microsoft's senior leadership team. Microsoft only discovered the attack nearly two months later in January, and the same group even went on to steal source code. These recent attacks have been damaging, and the Cyber Safety Review Board report added fuel to Microsoft's security fire recently by concluding that the company could have prevented the 2023 breach of US government email accounts and that a "cascade of security failures" led to that incident. "We are making security our top priority at Microsoft, above all else -- over all other features," explains Charlie Bell, executive vice president for Microsoft security, in a blog post today. "We will instill accountability by basing part of the compensation of the company's Senior Leadership Team on our progress in meeting our security plans and milestones."

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Microsoft is fully rolling out passkey support for all consumer accounts today. From a report: After enabling them in Windows 11 last year, Microsoft account owners can also now generate passkeys across Windows, Android, and iOS. This makes it effortless to sign in to a Microsoft account without having to type a password in every time.

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Microsoft has confirmed that the April 2024 Windows security updates break VPN connections across client and server platforms. From a report: The company explains on the Windows health dashboard that "Windows devices might face VPN connection failures after installing the April 2024 security update or the April 2024 non-security preview update." "We are investigating user reports, and we will provide more information in the coming days," Redmond added. The list of affected Windows versions includes Windows 11, Windows 10, and Windows Server 2008 and later.

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Microsoft's motivation for investing heavily and partnering with OpenAI came from a sense of falling badly behind Google, according to an internal email released Tuesday as part of the Justice Department's antitrust case against the search giant. Bloomberg: The Windows software maker's chief technology officer, Kevin Scott, was "very, very worried" when he looked at the AI model-training capability gap between Alphabet's efforts and Microsoft's, he wrote in a 2019 message to Chief Executive Officer Satya Nadella and co-founder Bill Gates. The exchange shows how the company's top executives privately acknowledged they lacked the infrastructure and development speed to catch up to the likes of OpenAI and Google's DeepMind. [...] Scott, who also serves as executive vice president of artificial intelligence at Microsoft, observed that Google's search product had improved on competitive metrics because of the Alphabet company's advancements in AI. The Microsoft executive wrote that he made a mistake by dismissing some of the earlier AI efforts of its competitors. "We are multiple years behind the competition in terms of machine learning scale," Scott said in the email. Significant portions of the message, titled 'Thoughts on OpenAI,' remain redacted. Nadella endorsed Scott's email, forwarding it to Chief Financial Officer Amy Hood and saying it explains "why I want us to do this."

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theodp writes: Reports of the death of Bill Gates' influence at Microsoft have been greatly exaggerated: "Publicly, [Bill] Gates has been almost entirely out of the picture at Microsoft since 2021, following allegations that he had behaved inappropriately toward female employees. In fact, Business Insider has learned, Gates has been quietly orchestrating much of Microsoft's AI revolution from behind the scenes. Current and former executives say Gates remains intimately involved in the company's operations -- advising on strategy, reviewing products, recruiting high-level executives, and nurturing Microsoft's crucial relationship with Sam Altman, the cofounder and CEO of OpenAI. In early 2023, when Microsoft debuted a version of its search engine Bing turbocharged by the same technology as ChatGPT, throwing down the gauntlet against competitors like Google, Gates, executives said, was pivotal in setting the plan in motion. While Nadella might be the public face of the company's AI success [...] Gates has been the man behind the curtain."[...] "Today, Gates remains close with Altman, who visits his home a few times a year, and OpenAI seeks his counsel on developments. There's a 'tight coupling' between Gates and OpenAI, a person familiar with the relationship said. 'Sam and Bill are good friends. OpenAI takes his opinion and consult overall seriously.' OpenAI spokesperson Kayla Wood confirmed OpenAI continues to meet with Gates."

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Eight prominent U.S. newspapers owned by investment giant Alden Global Capital are suing OpenAI and Microsoft for copyright infringement, in a complaint filed Tuesday in the Southern District of New York. From a report: Until now, the Times was the only major newspaper to take legal action against AI firms for copyright infringement. Many other news publishers, including the Financial Times, the Associated Press and Axel Springer, have instead opted to strike paid deals with AI companies for millions of dollars annually, undermining the Times' argument that it should be compensated billions of dollars in damages. The lawsuit is being filed on behalf of some of the most prominent regional daily newspapers in the Alden portfolio, including the New York Daily News, Chicago Tribune, Orlando Sentinel, South Florida Sun Sentinel, San Jose Mercury News, Denver Post, Orange County Register and St. Paul Pioneer Press.

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