- Satya Nadella hyped the perfect metaverse opportunity for his company during Microsoft’s earnings conference.
- He said it is an “opportunity at the platform infrastructure level and in the application level.”
- Shares jumped 7% after earnings as after the windows maker issued strong guidance for the third quarter.
Microsoft CEO Satya Nadella talked up the company’s opportunity in the metaverse during Wednesday’s fiscal second-quarter earnings conference. He said the metaverse “is an opportunity in every classic Microsoft sense, both at the platform infrastructure level and in the application level.”
He said that the computing software giant is bringing the virtual universe to its teams, enterprise and gaming products.
“Just like the first wave of the internet allowed everybody to build a website, I think the next wave of the internet will be a more open world where people can build their own metaverse world, whether they’re organizations or game developers or anyone else,” he added.
Microsoft bought leading video game developer Activision Blizzard in an all-cash deal worth $68.7 billion, making it the biggest metaverse bet so far.
The company described the acquisition as a key component for the future development of the metaverse, also adding that the gaming company’s impressive portfolio of products combined with Microsoft’s own gaming products provides an exciting prospect.
The Windows maker’s shares jumped 7% after releasing its most recent quarterly results, before trimming gains later in the day.
Although the company attributed its impressive performance to its cloud business, Microsoft Azure, whose revenues grew by 46% from last year, it sees the metaverse as a long-term opportunity.
For the short-term, the technology giant expects Azure cloud to continue driving growth, resulting in total Q3 revenue of $48.5 billion to $49.3 billion, surpassing the consensus for analyst expectations of $48.2 billion.
Commenting on the results, Wedbush analyst Dan Ives said “[the company] gave a robust cloud guidance ‘for the ages’ that will calm [market] nerves this morning and was a bullish data point for Microsoft and importantly the whole tech sector going forward,”
Cloud services are expected to play a crucial role in the industry-wide adoption of the metaverse as data storage, creatives, and software infrastructure providers move to the digital world.
With Azure’s rapid growth, Microsoft looks perfectly placed to capitalise especially given its recent multi-billion dollar acquisition of Blizzard.
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