Microsoft, now the world's third-largest gaming company by revenue, announced the layoff of 1,900 employees or about 8% of the Microsoft Gaming workforce. The company has also been making headlines for its AI efforts, with CEO Satya Nadella emphasizing AI as a key focus. Microsoft and its partner OpenAI are currently facing a copyright infringement lawsuit from The New York Times. Nadella's team had also shown interest in hiring Sam Altman, former CEO of OpenAI, to lead AI efforts at Microsoft, but Altman returned to OpenAI with new board members in place.
Key takeaways:
- Microsoft's second-quarter earnings were boosted by its acquisition of Activision Blizzard, with total Xbox content and services revenue increasing 61 percent year-over-year and total gaming revenue increasing 49 percent.
- The net impact from Activision on Microsoft included $2 billion in revenue, however, it led to an operating loss of $440 million due to costs and operating expenses.
- Microsoft announced the layoff of 1,900 employees, about 8 percent of the Microsoft Gaming workforce, as it seeks to merge the two gaming forces.
- Microsoft and OpenAI are facing a lawsuit from The New York Times for copyright infringement, alleging that articles published by The Times were used to train the chatbots, putting it in competition with the publication.