0:00

It's time for Windows Weekly. Richard Campbell is

0:02

in Portugal, Paul Therot's in Mexico,

0:04

I'm in Rhode Island, but we're going to talk

0:07

about Microsoft. Lots to say, including

0:09

Microsoft finalizing the Activision Blizzard

0:12

acquisition. Final words

0:14

about this, at least for some time. Microsoft

0:18

finally reveals how many Windows 11 PCs

0:21

there are. Can we call Windows 11 a

0:23

success? Plus, we'll

0:26

talk about that $29 billion

0:30

bill for back taxes.

0:32

How did Microsoft run up such a big tax

0:35

bill? It's all coming up next on

0:37

Windows Weekly.

0:40

Podcasts you love. From

0:42

people you trust. This

0:46

is Twitch. This

0:52

is Windows Weekly with Paul Therot

0:54

and Richard Campbell. Episode 851, recorded

0:58

Wednesday, October 18th, 2023. Between two ferns.

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slash podcast.

1:53

It's time for Windows Weekly, the show we cover

1:55

the latest news from Microsoft, of

1:58

course, with our good friend, to

2:00

my... are you on

2:02

my left or on your on my right?

2:05

Anyway this guy over here, Paul Thurotte who

2:10

is in Mexico City today.

2:12

He is poking us. Hi Paul from

2:15

Thurotte.com and LeanPo.com.

2:17

Hola Leo! Como

2:21

estas? And

2:24

in Portugal, in Porto, home

2:26

of port. And so there's... it's

2:29

kind of no... any port in a storm. Richard

2:31

Campbell. And it's pretty

2:34

stormy here today actually. Is it really? Yeah.

2:36

And you're in a conference I think. Otherwise

2:38

you've got people in your house walking around. I don't

2:40

know. The conference center is after hours

2:42

so things are getting tidied up but we're

2:45

all done now so we're ready.

2:47

Nice! Richard of course from Run As

2:49

Radio and I... from now

2:52

on I'm going to call you the peripatetic Richard

2:54

Campbell. I'm also, if you show the full shot,

2:56

he's also today ladies and gentlemen between

2:59

two ferns. Yeah.

3:01

They were nice enough to put ferns in my room. The least

3:03

I think I could do is put them in the shop. I'm sure

3:05

they saw you sitting against the wall and were like, you know what this

3:07

thing needs? Cone. Ferns! I

3:12

am, as I was yesterday, in

3:14

Providence, Rhode Island at my mom's house

3:18

visiting which is... I am a huge fan of

3:20

plantation shutters. I've always wanted those. Oh,

3:22

these are great aren't they? I love them. I love them

3:24

so much. She has a nice house

3:26

I have to say. You can leave the

3:28

top one open, walk around naked, no one needs to know.

3:30

It's all good. That's a good point. They just say,

3:33

maybe he's not wearing a shirt. Yep. We don't

3:35

know. Sometimes it's just the shirt

3:37

and nothing below so it's fine. There you

3:39

go. You fool them all. I think

3:41

if I open them up it'll be a little too bright so I'm

3:44

gonna keep them closed

3:47

against the typhoon.

3:49

Right, I don't... It's not

3:51

a typhoon. It's quite nice out actually.

3:53

Actually I'm glad I'm not back at our

3:55

studios. It is weirdly

3:57

in northern California, 90 degrees in Petaluma

4:00

and John Jammer B says

4:03

it's gonna be 96 tomorrow. Yeah,

4:06

I don't think weather can be predictable

4:08

anymore. There's no global warming. No.

4:11

Warming was the wrong word. It was more like global

4:13

chaos. I'll tell you where

4:15

we went wrong by calling it global warming or

4:17

climate change. It's pollution,

4:19

boys and girls. Growing

4:22

up as a young man, I have a

4:24

friend who would call, every time it was anything

4:27

lower than 70 say, oh, I thought we were having global

4:29

warming. And it's like, that's

4:31

not- No, no, no, that's a bad name. That's not

4:33

how it works. Yeah. Well,

4:36

we're not having global warming, but what we are having,

4:40

well, maybe we are having. We are having,

4:42

does it feel like I'm gonna, like

4:45

a little seance-y kind of environment?

4:47

Oh, spirits. Everyone, hold

4:49

hands, open your minds. Spirits wild.

4:52

If you are here, please tap

4:56

the table. Oh, it's

4:58

scaring my daughter. I apologize, Abby. She

5:01

thinks it is a seance. She thinks it's a seance.

5:04

Let us talk about the big news

5:06

of the week. Microsoft did it. They

5:09

pulled the string. Yeah.

5:12

And Activision- When you're loving version, oh no, I'm

5:14

sorry. Not that

5:16

string. This string over here, Activision

5:19

Blizzard deal is a fait accompli,

5:22

as the French would say. Except-

5:25

As they should. The FTC says, not

5:28

so fast, Jimmy. Which

5:31

is their name for such an- Surrounded by it,

5:33

as see. I don't know what

5:35

to tell you. This thing took

5:38

over six months longer than it should have. You

5:41

know, the CMA and the FTC

5:43

both had illogical and

5:46

fantastical arguments against it. One

5:48

of which was a post-decide

5:51

in court, despite the one million

5:53

pieces of evidence that they provided

5:55

to the court. The court saw no evidence

5:57

whatsoever to back their claim.

6:00

The issue for UK CMA,

6:03

the Competitive Markets Association was,

6:05

or whatever it is, was cloud

6:08

computing and Microsoft was

6:10

able to get them to shut up, giving

6:13

the cloud computing business to Ubisoft,

6:15

a French company. So here's

6:18

what's, there's two things interesting about that. That

6:21

deal is worldwide, right? So

6:24

if you want to stream Activision Blizzard games, you

6:26

can't do it through Xbox Game Pass Ultimate, you have

6:28

to actually go through Ubisoft. So

6:31

that's interesting. Also, the

6:33

FTC, which you noted is still kind

6:35

of being a sore loser about this and is trying

6:38

it internally after the fact. Guess

6:40

what they're worried about Leo? Can you guess? Cloud

6:42

gaming? Cloud gaming. Yeah. Despite

6:44

this deal, which lasts for 15 years,

6:46

not 10, like its other deals. They

6:50

are still, this is still a concern for these people. So

6:52

I listen, after 15 years

6:54

is over, there will be two administrations

6:57

away from them anyway, so who cares? But

7:00

this is, to me is the story of the

7:02

story, like the illogical

7:05

nature of the regulatory actions that have occurred

7:08

against Microsoft. I'm going to ask you

7:10

this though, both of you, is this a good

7:12

deal for Microsoft? Yeah,

7:15

this is a good, no, that's a good question because

7:17

I, yeah, I saved an article I've not

7:20

read in depth yet, but it was

7:22

basically an analysis of what

7:25

the return on investment might look like because Activision

7:28

has a certain amount of revenues each year

7:30

and there are different game franchises going

7:32

in different directions and what might this look like? Microsoft

7:35

moving things into Game Pass changes the

7:38

scenario dramatically for revenues and

7:41

it's kind of an open question, but the basic

7:43

point of the article is it's going to be hard for them

7:47

to get a financial win out of this. And

7:50

that's a, that's probably a good point. I

7:53

think Microsoft would call

7:55

this an investment. Yeah,

7:57

this is a long term play. recognition

8:00

that there's only going to be

8:02

so many entities that are going to be delivering

8:04

games to consumers.

8:09

Whoever has the most studios is going to win.

8:11

The same way that Disney is dominating

8:15

in the TV space. I would

8:17

just call it entertainment space, right? I mean,

8:19

because it kind of transcends movies

8:22

and just their in-person park

8:24

stuff is a big part of it too. Yeah. So,

8:26

you know, well, it's a pretty neat role.

8:29

Doesn't that kind of imply the FTC was

8:31

right? No.

8:34

This is a winner takes all market and

8:37

if you want to compete. So the FTC's

8:39

concern was that this market

8:41

for game streaming might one day be a big deal. You

8:44

won't find anyone in the gaming industry actually. No, no,

8:46

no. I mean, I think we all agree cloud gaming is

8:49

such a tiny market and has not is unproven.

8:52

And at this point, really likely not to be

8:54

an important market. Well, but you can't unwind

8:57

the things that have already occurred elsewhere in the industry, right?

8:59

So we have Steam, which is very dominant on Windows.

9:02

We have Sony, which is dominant

9:04

in traditional high performance

9:06

consoles. Nintendo, which has its own special

9:09

space, you know. Yeah, but look at Epic,

9:12

which you might say is an equal of those

9:14

that just laid off like 15%

9:17

of the workforce. Yeah. Yeah.

9:20

And I wouldn't say equal up. No,

9:22

I wouldn't either. But here's the thing. I feel like we

9:24

might have semi-debated this at one point a month or two

9:26

ago. But the problem

9:28

is that the natural consolidation that's

9:30

going to occur here is going to occur here anyway.

9:33

And denying Microsoft access

9:37

to a market in which honestly,

9:40

I have to say in pretty, I don't often

9:42

talk about Microsoft this way, but very good faith

9:45

has made the concessions. I think

9:47

that kind of settled the competition

9:50

worries and honestly

9:52

speak to the thing that I got into a little

9:55

naive in a way. But this notion that gaming

9:57

should be open and everywhere and that exclusives

9:59

are. and you know Microsoft

10:02

can't change the market but both Sachin Nadella

10:04

and Spencer well

10:06

it was called Phil Collins there for a second.

10:10

I don't know where that came from. They

10:14

both spoke openly about their

10:17

desire for that for that to be the case and and you

10:19

know people that are worried that this deal will somehow

10:21

restrict gaming in general there will definitely

10:24

be exclusives that come out of this are

10:26

kind of missing the point because in general this will

10:28

make gaming available games I should

10:31

say games more games available more places

10:33

into more people and was the case before the

10:35

acquisition. You say

10:37

in your article you call the FTC

10:39

sore losers and

10:42

you say the FTC can't stop obsessing

10:45

over their stunning defeat at

10:47

the hands of Microsoft. I don't want

10:49

to get like unfortunately this is literally

10:52

a political issue that's all this is

10:54

and that makes me sad because I don't want to go down

10:56

that rabbit hole but there

10:58

is a mandate

11:01

in the current presidential administration for

11:05

regulators to go after big tech

11:09

and they're doing it not

11:12

to existing companies that have things

11:14

they're going it they're going just going after new deals

11:17

and that's what I think is the problem. I

11:19

think this company of this regular regulatory

11:21

body and also the US Department of Justice

11:24

which actually is doing this by the way she focused

11:26

on the existing monopolies that are being abused.

11:30

Not the speculative ones that may appear

11:32

from. Not the minority report future crimes

11:34

we made this up in our head during a fever dream crimes

11:37

that might or might not happen in the future there are very

11:39

real problems in big tech with regards

11:41

to monopoly abuse both

11:44

of consumers and competitors

11:46

and this

11:49

is one of them. Sorry it just

11:51

doesn't. And market consolidations

11:53

happen in lots of other entertainment media. It's not

11:55

going to happen whether you want them to happen or not that's

11:58

the thing. prefer

12:00

on the world of, you know, I don't

12:03

know, small game companies, you know, playing

12:05

the way and making lots of money and being

12:07

successful on algorithms. But they

12:09

can't do that. There's no

12:12

way to build a game for

12:14

the PS five with a small team. It's

12:16

just not a thing. Yeah,

12:19

I might argue with that. You know, the game that I really

12:21

like called Valheim is developed

12:23

by an independent

12:25

gaming company. They're, I think

12:27

only, you know, less than a dozen developers.

12:30

They're distributed by Coffee Stain Studio.

12:34

They're sold at 20 bucks on Steam.

12:36

They're on the Steam platform. So that's

12:38

their marketing platform. And

12:41

it's 20 bucks and they have sold, I think

12:43

they said, 100 million copies now. Wow.

12:47

Yeah, but it's very successful. They're

12:49

notable maybe game developers. No,

12:51

I mean, some indie game developers are successful,

12:54

but I think this is like any other industry. Music industries

12:56

like this, movies are probably like TV shows.

12:59

The high profile successes are all well understood.

13:01

But the million other

13:04

companies have failed without a peep.

13:07

Go unnoticed.

13:09

And I just, I'm

13:11

just, I guess what I'm, I guess my point counterpoint

13:14

is that it doesn't require a massive

13:16

company, massive marketing and billions of dollars

13:19

to make a triple A title. But

13:21

you're right that it's kind of

13:23

like the music industry, which is that the platinum

13:26

albums are few and far between. And occasionally

13:28

you get a Justin Bieber who made it on YouTube,

13:30

but that, but that's not the normal case. A

13:34

company like Activision Blizzard had

13:36

to buy King to get into mobile.

13:39

Right. Just to get it. The most important

13:41

gaming market in the world was

13:44

unattainable by some of the biggest gaming companies. Isn't that interesting?

13:47

Well, and that's why Microsoft acquired

13:49

Activision Blizzard. Yeah. I mean, I

13:51

think that speaks to the, like for a game like Valheim is

13:53

kind of interesting, but say you're that developer. By the way,

13:55

Valheim is on Xbox, not on PlayStation, but

13:57

it is on Xbox. So let's say you're, okay. But

14:00

that's the actually that's okay that speaks to my point so

14:02

I was gonna say for them to actually create

14:04

this game that works across Three

14:06

major platforms that type of game would work on

14:08

which is PC PlayStation and Xbox

14:12

That's an enormous separated. It's hard enough

14:14

for a mobile developer to get ready I

14:17

started on Linux Amazon. I mean I'm Native

14:21

it's the Linux native game. Oh Linux.

14:23

Okay, I mean, but you know what? You know why they could

14:25

do it by the way in all seriousness unity.

14:28

It's built on unity And honestly,

14:30

that's really to me. That's the choke

14:32

point in gaming is unreal engine

14:35

and unity Okay,

14:38

those two Well, but

14:40

see that's a to me that democratizes

14:43

cross-platform development right that this is

14:46

yeah you and I could do a unity game if

14:48

we had skills and talent right and Time

14:51

and the time need to make money 20 years younger.

14:53

Yep I'd

14:56

it's hard. It's These

14:59

get you know games have gotten so complex to call a duty

15:01

game is essentially a Hollywood blockbuster And I mean

15:04

that in sense of terms of budget the size of the

15:06

team right the actors required You

15:09

know the investment and he

15:11

said the words a Leo you said AAA

15:13

games like those top tier

15:17

Titles are nine

15:19

digit numbers to produce. Are you ready

15:21

for this cyberpunk? Which

15:24

which was very highly hailed but

15:26

really I think is somewhat of a failure as

15:28

a game for 100 400 million

15:32

dollars. Yeah, that's what to

15:35

develop it. Yeah a 100 something

15:38

million for DLC Yeah,

15:41

very expensive to do these. Yeah,

15:43

so it's hard. You know you right that's that's not an investment

15:46

It's an impossibility for most companies.

15:48

Yeah, you know, it's just it but it didn't

15:50

pay off No,

15:53

but you know, I by the way give them credit. They keep trying

15:56

I don't play this game, but apparently it's got a lot better since

15:58

long. Yeah, too late By the way,

16:00

first impressions matter in gaming. And

16:04

I'll always think of Cyberpunk 2077 as unplayable.

16:10

I always think of it as Keanu Reeves. Yeah,

16:13

Keanu Reeves and unplayable. I always

16:16

do. Anyway. So the

16:18

debate about Activision to Blizzard will

16:20

continue for years to come, right? When

16:23

Microsoft bought LinkedIn, I questioned whether

16:25

that investment made sense. I question it today.

16:27

I don't think they've ever, whatever it means to

16:29

make money, right? Because there's a lot

16:32

of soft revenue that's

16:34

hard to, maybe I should call it, indirect

16:36

revenue, that's hard to directly

16:39

attribute to that thing that

16:41

you acquired, right? So in the case of Activision Blizzard,

16:44

there'll be some upswing probably in Game Pass

16:46

subscriptions. Does

16:50

that justify their, what

16:52

they did? We'll find out, we'll see. It's kind

16:54

of like when Adobe bought Figma, which by

16:56

the way they've bought it. Did

16:58

they buy it? They've kind of moved on, but

17:01

it was said they had to pay two

17:03

billion for Figma because Figma was

17:05

gonna eat their lunch. So is it an offensive

17:07

acquisition for Microsoft? No,

17:10

I mean, they're the third stringer, and

17:13

still are even with this deal in place. There

17:17

isn't anybody else doing consolidation quite like

17:20

this other than the original incumbent, which is Steam,

17:22

but Steam's not doing a Game Pass.

17:25

They'll sell games one at a time. And

17:28

was it you? I think someone was talking to me about, oh

17:30

no, I think, I'm sorry, I talked to

17:32

Brad Wardell recently from, no, from

17:35

startup. I'm sorry, it was you or him,

17:37

or somebody was talking to me about how successful

17:40

Steam was. And Steam is successful

17:42

doing something very old school, which is what you just described.

17:44

They just, they don't do advertising. They

17:46

don't do, they don't have, like advertising

17:49

in the game or in the app, rather, they

17:51

just, they sell games. Here's the game. Here's the much you

17:53

can pay for it. That's the whole thing they do, and

17:56

it's the biggest game store on Windows. And to be clear, if Steam

17:58

was publicly traded. It would

18:00

be much worse, right? Then

18:03

the Cory Doctorow effect would take over That's right.

18:05

It's owned by a small collection of people who are

18:07

now extremely wealthy Gabe

18:10

not valve and it's interesting because

18:12

at first steam was just a place to valve for valve

18:15

to distribute their their own game They're on game. Yeah,

18:17

but really they have become an Ingram micro

18:21

Store that's really one has emulated And

18:25

no one has had that level of success

18:27

and a lot of the game publishers that emulated

18:29

them in the beginning with their own Stupid front ends

18:31

and all you know, we've all seen this stuff in the PC space have

18:34

often moved on to Sort

18:36

of a subscription services now, right? It's

18:40

not just a front end to sell them your stuff or to

18:42

launch your games or whatever It's let's

18:44

get you going on a subscription You have to be of a certain

18:47

size and have a game catalog of a

18:49

certain leg And we're subscription service

18:51

to make any sense. Yeah, you can do it and does

18:53

right? Ubisoft does it and

18:56

Are we hitting the end there? I mean, it's

18:58

kind of you know, as far as independent publishers I mean it's an

19:01

out of the game, you know in the EA had how many

19:03

false starts ten there's well Like

19:06

it turns out it's not simple software right EA

19:08

is to sports what Nintendo is

19:10

to the sort of Disney

19:13

crowd, you know, it's just unique kind of market and

19:16

it's probably going nowhere And I

19:18

don't mean that in a negative way. I mean it their market is

19:20

sustainable and They're

19:22

kind of unique. So you almost have to take them

19:25

out of the equation to write No

19:27

one is subscribing to EA play for their non

19:30

sports games and I put that with an I mean obviously

19:32

something Yeah, even in the tribe, but

19:34

I also argue Like

19:37

if you take away Sony's

19:39

disingenuous complaints And

19:42

they later just about yes

19:44

and the psychosis of

19:46

certain regulatory bodies Right,

19:49

this was kind of a non event

19:52

like yeah, it's a lot of money because of its

19:54

size But it didn't actually move

19:56

the needle massively for anything and

19:59

the real value you play I see for Microsoft

20:01

is strictly long term that consolidating

20:04

these studios and continuing to allow them to

20:06

make games so that you have

20:08

a larger representation in the market so that you

20:10

don't have no representation. I don't know,

20:13

someday we're going to hear this story explicitly

20:15

but when Sacha Nadella took over

20:17

as CEO of Microsoft, he

20:20

very quickly got rid of Windows Phone and

20:22

there was this kind of an edict that look you, you,

20:25

parts of Microsoft need to justify your existence,

20:28

you need to make money. And

20:30

it's interesting to me that businesses like Surface

20:32

and Xbox survived this

20:35

because frankly I think you

20:37

could have made a compelling case in 2014. You

20:40

let it all go. You let them go and

20:42

they did it and so again I don't know the explicit

20:45

story but Phil Spencer most likely someone. I

20:47

think that was exactly my thought Spencer.

20:50

Talked to him and said listen this is the, this

20:53

is what's required and this is what could happen

20:56

and they went from zero external

20:59

game studios basically to something

21:01

that rivals Sony and

21:04

went on an acquisition spree which is a

21:07

huge investment. Not just

21:10

Activision Blizzard but of course Bethesda,

21:13

ZeniMax or whatever

21:15

which was in its own right huge.

21:18

And a lot less by the way. Yeah,

21:21

yeah well yeah, yeah I mean they

21:23

bought, honestly no that's

21:25

not true. I was going to say it's kind of a toss up between Activision

21:27

and Bethesda which

21:29

you know games I like more I guess it's actually kind

21:31

of a toss up. But now

21:33

they have this, now they have an Xbox that

21:36

can make sense going forward. And Xbox today

21:38

and going forward is not the Xbox that was in 2014, it's

21:41

not a console with

21:44

one subscription that lets you play multiplayer gaming

21:46

which is always stupid to me. It's

21:48

a suite of subscriptions, it's cross platform,

21:51

it's game streaming we'll see. And

21:56

yet another renewed push from them on PC

21:58

except this time it's been sustained. You

22:00

know, people kind of... The big difference between the phone and

22:02

the Xbox Play is that the Xbox Play

22:05

moves to the cloud. Yes, exactly, which you

22:07

couldn't do with the phone, right? Exactly. And

22:10

so, in the end, the best argument Phil Spencer had to

22:12

such is, I'll consume your cloud

22:14

and I'll collect money every month doing it. This

22:17

has been the story of Microsoft, I would say, up

22:19

until the AI era. Not that

22:21

it necessarily changes, but you have these

22:23

traditional software businesses and in some cases,

22:25

I guess, hardware. And how

22:27

can you make sense in this new Microsoft? This

22:29

new cloud-focused Microsoft. Microsoft 365, no problem. Server

22:33

business, no problem. Xbox,

22:36

okay, there's your argument. They've made that switch.

22:38

You know, Windows cannot make the shift. Surface,

22:41

obviously, can't. It's a superior hardware business. And

22:45

you just kind of take it from there. That

22:48

is the answer. And the counter-argument is true also.

22:50

If they weren't doing Game Pass,

22:52

then you should shut down Xbox. Yes. Because

22:55

it doesn't. They're out to launch. So

22:57

this pivot and all of this push

23:00

is about keeping Xbox relevant to new

23:02

Microsoft, the Microsoft that cares about selling

23:04

compute. Honestly, maybe

23:06

someone knows off the top of the head, what year did the Xbox

23:09

One debut? It was probably 2011. That sounded

23:11

about right. 2013, I don't

23:13

remember. But whatever year that was, that

23:16

thing failed so hard, it enabled

23:19

what's happening today. If

23:22

that product had been in any way competitive

23:24

with PlayStation, I bet Nadella

23:27

would have gotten rid of it. You know, would have spun it

23:29

up. Because if that

23:31

thing being successful in the console

23:33

market would have kept Xbox

23:35

in the console market. Yeah. And

23:37

kept it into selling games. And that's not

23:39

the business that Microsoft wants to be. And

23:43

there's a side effect of this, which is it also parallels

23:45

Netflix, Disney, the entertainment

23:47

consolidation, which does seem like

23:49

more modern thinking. But I don't think it was

23:51

done for that reason. I think it was done to consult compute.

23:54

And then it's shit these other things. Sure,

23:56

in the 1980s, people were wringing their hands

23:59

over the console market. consolidation that was occurring in the movie

24:02

Industry where like, you know paramot was bought

24:04

or I can't think of names a these old companies

24:06

But he is merging the old series of words,

24:08

you know And and now we're seeing a kind

24:11

of a different era where Netflix comes along as

24:13

a disruptor Creates this

24:15

incredible thing where all of now Hollywood's

24:18

a list actors all want to act in TV series,

24:20

you know, right? It's an incredible thing basically mini-user.

24:23

Yeah, I took the HP model and really ran with it Yeah,

24:26

and now that markets gonna be consolidated and that's

24:28

how quick life moves these days It's you

24:30

can't stop it. We can kind of hate it. We can

24:33

not want it to happen. But it I just feel like

24:35

it's unnecessary, but it's It's

24:39

too bad, but it

24:40

it's inevitable And

24:42

I still firmly believe in this space for the Indian

24:45

game developer So, yeah, and

24:47

I have Frank that are in that space And it's like, you know What

24:50

my business model is my business model is coming up with a really

24:52

great game idea that my small team can build But

24:54

then the big player buys me I I

24:58

mean I

25:00

Sony and Microsoft both and I

25:02

don't know Nintendo. I don't know what they're doing and

25:05

I don't know what steam does if anything But they have

25:07

big independent game Efforts

25:10

that I don't feel are done as

25:13

a

25:13

face-saving gesture. I think they're real I think

25:15

those people that love games understand some of the best

25:17

games do come out of those kinds of studios Yeah,

25:20

just like some of the best movies which no longer

25:22

have any access to movie theaters whatsoever Used

25:25

to come out of small studios as well So,

25:28

you know who knows maybe the this whole Subscription

25:32

thing maybe the upside to it the Netflix effect

25:34

will be to again democratize

25:37

Not the creation of the games, but rather the distribution

25:39

of the games, right? So

25:42

it maybe it's not a net

25:43

negative The negative effects

25:45

are real but I but

25:47

I don't think this crushes the small guys No,

25:51

I think there's still room for the small guys that

25:53

is actually changed Yeah, this

25:56

was the same game that was being played all along where

25:59

the big players

25:59

do not build innovative games. They build

26:02

the retread of the previous game that made the million

26:04

dollars. Exactly. I, I, as I call

26:06

a duty fan, I, I recognized it's a resemblance

26:09

to the Marvel universe. If you're

26:11

spending $400 million on a game, you

26:13

want to win, right? You've got to be

26:16

a pretty safe bet. You understand the conservatism

26:18

that exists in that the innovation has been

26:20

the indie layer. And when they come up with a winner,

26:22

Oh my

26:22

God. They get passion. Right.

26:25

Super meat boy or a firewatch or any of those

26:27

games that come out of nowhere. It's like wonderful. This is

26:30

these beautiful, small stories. Uh,

26:32

the, uh, the inside was an example too, uh,

26:34

would never, no one,

26:37

no big studio would ever bother with us though.

26:40

It's a close analogy between the movie industry

26:42

and the gaming industry. Yeah. Isn't there? I mean,

26:44

that's entertainment. But do you,

26:47

you so, I

26:49

mean, the argument against regulating tech in

26:51

any way is that well, market forces

26:53

move so fast in tech that

26:56

you're always going to be behind the eight ball if you try

26:58

to regulate it. You're going to be regulating the problem.

27:00

That was 10 years ago. The downsides that

27:02

are too big, big tech is, uh,

27:04

the big is in the name. It's these are businesses

27:07

that are bigger than countries.

27:09

Um, they impact billions of users

27:11

every day.

27:12

You have to regulate this. And I wouldn't, and

27:15

I wouldn't be gradually FTC for scrutinizing this,

27:17

but only if you scrutinize the matter is

27:19

this hurting consumer.

27:21

We got to go back to the, uh, Marguerite,

27:23

uh, vestiges are there from the, you

27:26

and her, her,

27:27

her speech about the point of antitrust

27:30

regulation and how the CMA and

27:32

by, uh, indirect comparison,

27:35

also the FTC just kind of got it wrong. It

27:37

isn't, you're not here to say no.

27:40

You're here to do the right thing for competition

27:42

and or consumers. And if

27:44

you can get concessions out of a company that's

27:47

trying to acquire another company as Microsoft with Activision

27:49

Blizzard,

27:51

then

27:51

solve the issues that the concerns you

27:53

have,

27:54

then why wouldn't you say yes?

27:58

There has to be a top.

28:02

Otherwise you're just there to prevent forward

28:04

progress. I mean I just I guess you

28:06

know if the world is just we just don't like

28:09

big things. Yeah well

28:11

any of you anti-american frankly I mean

28:13

give it a mission to put your thumb on the big

28:15

guys. Yeah

28:18

the reason we don't like big things is because

28:21

market incumbents can become just as you

28:23

just said so big they can't fail

28:26

and there's no one who can compete with them and so we've

28:28

got to keep them from dominating.

28:30

Abuse, from abusing their dominance.

28:32

That's literally anti-trust. There is no any trust.

28:34

There is no any trust. There is no any trust of a company

28:36

that achieves a monopoly at scale and does not abuse

28:38

the market in some way. It's the natural

28:40

nature of that thing because once you achieve dominance

28:43

your next step is to maintain that dominance

28:46

and extend it and it's impossible

28:48

not to do anti-competitive acts to

28:51

make that happen. It's just that. You know

28:53

on a free market economy there are some

28:57

limits you have to place on it and we learned

28:59

very early on one of them is monopoly

29:03

and you have to have anti-trust otherwise the free

29:05

market does not work in the long run.

29:08

That's

29:09

right. So you could be a free market capitalist. You have to put a thumb

29:11

on the scale. But there

29:13

are a couple of areas where you have

29:15

to regulate otherwise you

29:17

know unfettered capitalism has ill

29:20

effects. I feel that. Is

29:23

that right? Sure. No

29:25

it's 100% right. Sorry.

29:30

But this is not one of those cases. No

29:33

because that's the point. So in other words

29:35

literally going back to last December when the

29:37

FTC first said that hey we're going to block

29:40

this thing. You look at the arguments.

29:42

You look at what Microsoft is doing. You look at all the

29:44

concessions they've made. You look at all of the

29:47

partnerships they've made for 10 years on

29:49

games. You're getting them on other

29:51

platforms. You look at how they went

29:54

to Sony with this and Sony said screw yourself. Actually

29:58

Sony said nothing which is even worse.

29:59

made up stuff

30:01

to get regulatory bodies to back them

30:03

in opposing this acquisition. But

30:05

if you actually look at it without emotion and you look at

30:07

it logically, barring

30:10

any, you know, again, fantasy you could invent in your

30:12

mind, there is no logical reason, no

30:15

legal reason maybe is the best way to put it. There

30:18

are no competitive concerns. Like Richard said

30:20

that whatever

30:22

amount of money this is, $68, $69 billion, whatever, they're

30:26

still number three. Like they didn't really,

30:28

they didn't move up,

30:30

you know.

30:31

They just made their platform stronger.

30:34

They are going to expand the availability

30:36

of the games from the company they purchased to more

30:39

people than that company ever would have

30:41

done. Activision Blizzard was never

30:43

going to make subscription services

30:46

and put these things on other platforms. This is something

30:49

Microsoft will do.

30:53

Is it the case, I guess it's the case that

30:55

you have to be number one in the market

30:58

for to be prosecuted

31:00

under, on any trust. I mean you can't prosecute

31:03

somebody who's number three. Not necessarily,

31:05

right. I mean you have to sort of invent a scenario here. Say

31:07

you're, you know, Burger King is

31:09

number two and it's pretty close with McDonald's

31:11

and they're doing some anti-competitive act

31:13

perhaps in their case. Yeah, they're ahead. You could

31:16

still bring them up on Monopoly. They're

31:18

applying all the B producers in North America.

31:22

You also see regulators scrutinizing Boeing

31:24

and Airbus together because they're... They

31:27

monetize Apple and Google together for the

31:29

App Store policies which Google has demiographed

31:32

and applied to their own platform. They

31:35

may not be working in concert explicitly.

31:38

They're absolutely working in concert and the

31:41

existence of the other is the thing they

31:43

can use to justify their own behavior. You

31:47

know, they're roughly 50-50 split in the US. It's

31:49

a little different international but still

31:51

they can simply say, yeah but Apple's doing

31:53

it and they're the biggest so why don't you go after them. Yeah.

31:56

Yeah. I think people are seeing through

31:58

that. That's how it works. business

32:00

model except I think in this case I don't think they

32:02

actually do talk about it you know internally together

32:05

but I think they recognize it and I think they both

32:08

explicitly understand it. Right. And

32:11

they all have both a mutual benefit for it. We

32:14

can bring up the Boeing Airbus scenario because

32:16

they were pretty hostile to the other airline

32:19

entities that were out there and a couple of

32:21

times the regulator said hey we can't see

32:23

if you guys are explicitly colluding but it sure

32:26

looks like it so bad. It's a little

32:28

too close. Yeah. Yeah. You

32:31

know you both benefit from keeping others out

32:34

but the market doesn't. I mean we

32:36

spent the past year or more talking

32:38

about Activision Blizzard.

32:40

We're going to spend the next year or more talking about

32:42

it. It feels like a year but it's only been half an hour. Yeah.

32:45

So no but I mean because

32:47

things are going to happen right. Look

32:51

I can I'll just shortcut the chicken littles

32:53

of the world right now. Yes I'm sorry Microsoft

32:55

slash Activision Blizzard will announce

32:58

that some game that might have been cross platform

33:00

before will only be on Xbox as a platform

33:02

right. And that will be like C that will be the most

33:04

CCC to which I'll just point to

33:07

the list of Sony explosives and say tell me when

33:09

these get close because when those lists

33:11

are a little different you can have your little debate.

33:13

But until that happens they're just playing in a market

33:16

that exists that they did not create and do not want

33:18

frankly but whatever.

33:20

It was a really motley fool

33:23

right which is kind of a financial publication

33:25

I guess we'll call it an investing publication or whatever.

33:28

I did a little analysis

33:30

of this deal and I had to stop reading it. They were so stupid.

33:33

You know according to the according to them Microsoft

33:36

was forced

33:37

by regulators to keep Call of Duty

33:39

on

33:40

PlayStation when in fact they

33:42

were always going to keep it on PlayStation that that

33:45

franchise would have died without PlayStation. Call

33:48

of Duty is bigger on PlayStation than it is on Xbox.

33:51

So

33:51

there's a lot of

33:53

like it's kind of a stay in

33:55

your lane kind of a thing.

33:57

You know because Microsoft was involved with

33:59

antitrust. We had to,

34:01

on our side of the fence, learn a little bit about the law.

34:04

You know, it's not our world. I'm not an antitrust

34:06

expert today. I'm not. But

34:09

20-something years in, I've certainly had my

34:11

little... I've certainly played around

34:13

with it. These guys don't

34:15

know anything about video games or technology, from what

34:17

I can tell. And that's just

34:19

sort of an...it's not uninformed. It's just wrong.

34:22

And these are the kind of opinions

34:24

we're going to be hearing about this stuff. They're

34:26

the emotional ones from people like, I just don't like

34:28

the big getting bigger. And I'm like, yeah, I completely

34:31

get that. I don't either.

34:32

But we don't really have laws against that

34:34

unless they abuse their bigginess,

34:37

right? And then they're going to be the people that just

34:39

don't understand this market at all. And

34:42

we'll say, well, they're screwing

34:44

the little guy, or they're going

34:45

to stop putting games on other platforms.

34:48

These guys are going to put Call of Duty on Nintendo.

34:51

The thing that's been interesting about this is, I

34:53

don't think there was ever a grassroots movement

34:55

against it. That it was always Sony. It

34:58

was always the competitors who

35:00

didn't like it. There was always the sense of disingenuous.

35:03

So what happens is, by the way, way back in the beginning, I'm not going

35:05

to remember one of these companies, but

35:09

Google and...was

35:11

it Overstock? What other company

35:14

sort of came out and said, we don't like this, right? And

35:16

then you never heard from them again. But what happens

35:19

is, behind the scenes, they lobby regulators. And

35:21

I'm sure that the FTC, especially,

35:24

I can't speak to the CMA, but the FTC,

35:26

their documentation looked like it was written by

35:28

Sony. It was the same insane...and

35:32

even Sony and Jim Ryan, right? The

35:34

guy who's leaving soon, who read PlayStation

35:37

the past several years, came out afterwards. We

35:39

were just kidding. We

35:41

never believed that joke. We just didn't

35:44

want it to happen. Their answer was literally,

35:46

we just didn't want it to happen. But

35:48

it's on the regulators, the people who have to make these

35:50

decisions, to actually understand that

35:52

they can't just listen to a competitor. Right. That's

35:55

what

35:56

the use were. Alright,

36:01

what else? I want to wrap this one up. I'm sorry.

36:03

A couple of the points related to this.

36:06

For this to happen, the UK CMA had to accept

36:08

their concessions, which they did, right, a couple of

36:10

days before they announced the acquisition.

36:13

Those concessions, as we discussed earlier, involved

36:16

putting game streaming stuff,

36:19

all the Activision Blizzard games will

36:21

be streamed through Ubisoft.

36:23

Who will pay Microsoft, by the way? This is a giveaway.

36:26

You know, Microsoft's not going to lose money on this. And

36:28

the irony here, I think, is that I don't think game

36:30

streaming for Microsoft was ever going to be a money-making

36:33

business. And by offloading this to another

36:35

company that, you know, we'll see

36:37

how they'll make a run of it, game streaming will become

36:39

profitable for Microsoft because they're just going to get paid for

36:41

it. And they don't have to manage the infrastructure.

36:44

At a lower risk. Yeah. It's just, it's

36:46

kind of a, it's such a stupid thing, but you know, the

36:48

CMA is stupid, so that's fine.

36:50

Like we said, the FTC came up later. Yeah, we're

36:52

still, oh yeah, we're still doing it. Okay.

36:55

And then unfortunately, because this deal was delayed

36:57

so long,

36:59

Microsoft's not going to be able to put any Activision

37:01

Blizzard games on Game Pass until next

37:03

year. In an ideal scenario,

37:05

we would have seen right now what happened with Bethesda

37:08

three-ish years ago, I think it was, and

37:10

we would have seen the back catalog appear,

37:13

probably, or at least some of it, right? And,

37:15

but this gets into this debate. This is going to be a huge

37:17

discussion we have over time, over

37:19

time, right? Which is that what's

37:23

the right strategy for these games? Like consider something

37:25

like Call of Duty. Call of Duty's got a brand new game

37:27

coming out any second now. It's

37:29

a big deal for the company. This is their big event

37:31

every year where they make billions of dollars.

37:34

What if the same month that that new

37:36

game was coming out, Microsoft slash Activision

37:38

Blizzard say, good news, we're going to put

37:40

every back catalog game in the Call of Duty

37:43

series on Game Pass. And

37:45

then some number people go

37:48

to Game Pass. How many of them don't buy

37:50

the new Call of Duty? Because they have

37:52

this incredible wealth of content

37:55

that they could either revisit or visit for

37:57

the first time. What is

37:59

it? I don't know, there's no answer to this, right?

38:02

I'm sure there are experts at Microsoft and Activision

38:04

Blizzard who sort of have ideas,

38:06

but until they actually do it, there's

38:08

no way to know.

38:09

But they could tank a Call of Duty title

38:12

and that hundreds of millions

38:14

of dollars investment by putting

38:16

other games on Game Pass, right? So you have to really

38:18

think about that stuff. You

38:19

have to put that in their minds, that's not...

38:21

You have to think about it, you know? Give

38:24

them the idea. I was just

38:26

saying it's not there. Sony could tank

38:28

it by saying we don't want Call of Duty, right? Doesn't

38:30

Sony get to say... They can't say that. They

38:33

can't say that. There is a huge percentage of the years

38:35

of base that the reason they're on PlayStation is

38:37

because they call it duty. Can't

38:39

do that. Can't do that. There's

38:41

also, you know, by the way, speaking across platform, do

38:45

we put it on Sony or do we take it away from Sony? That

38:47

kind of stupid stuff that people still want to debate.

38:50

As an Xbox gamer, it was

38:52

hard for me several years ago when

38:54

the exclusivity deal that Activision used

38:57

to have with Microsoft and Xbox went to Sony.

38:59

And what that meant for several years was that

39:03

you would get things first on PlayStation, right? So

39:06

new maps would come out and they'd come out on PlayStation. We wouldn't get

39:08

them until one, two, three months later in some cases

39:11

on Xbox. So you kind of felt like a second-class citizen. That's

39:14

evened out a little bit in recent years,

39:16

which is kind of nice. Typically now I'd say

39:19

the DLC is kind of universal. It gets out all

39:21

platforms at the same time. But the really neat

39:23

thing about cross-platform is if

39:25

I'm playing games against people on Xbox,

39:28

and that's my only audience,

39:30

that's a subset of the full Call of Duty

39:32

audience.

39:33

What they do now is cross-platform play. So I actually

39:35

play against PC gamers. And I

39:37

don't play against anybody. I don't play any games. But

39:40

generally speaking, an Xbox gamer, an Xbox fan

39:42

on Call of Duty, when they play online,

39:44

plays against gamers who are on PlayStation and

39:47

PC as well as Xbox.

39:49

It's not exponential, but it grows the audience

39:51

dramatically. The audience on

39:54

PlayStation is bigger.

39:56

The audience on PC is probably bigger. Actually, I have

39:58

no idea on that one, but I bet it is bigger.

40:00

So you're playing with at least three times

40:02

as many people

40:04

as you would otherwise That's maybe the easiest way to

40:06

say it that benefits me

40:08

as an Xbox user, right? Cuz I'm

40:10

on the smallest platform basically So

40:13

if they weren't serious about cross-platform Xbox

40:15

would actually be less viable to me as

40:18

an Xbox fan That's

40:20

the what that's the actual logic behind

40:23

what Microsoft is doing not that Oh, they're

40:25

gonna take it away from so you know, you know, they're

40:27

not they're never doing and all multiplayer

40:29

games have a cloud back in

40:31

Which you know notably who I mean it got

40:33

if only we could think of a company That

40:36

was allowed.

40:37

Anyway, we can't so it doesn't matter but that's

40:39

theoretical Anyway,

40:42

so there's all that so that that's basically

40:44

most of what's happening here We're

40:48

I don't know that we're gonna hear much before the holidays.

40:51

We're in that crucial selling season I don't think Microsoft

40:53

wants to

40:54

rock the boat at a time when people may or may not

40:56

be baking their own little investments in a New console

40:59

or you know buying a game or whatever it might

41:01

be but next year is gonna be super interesting on the Activision

41:03

front

41:04

And I think that's true whether you're on game.

41:06

Yes, sir I'm gonna be interested to see how

41:08

the massive multiplayer games like World

41:11

of Warcraft Of all right

41:14

in my experience watching them work

41:16

with these gaming Studios and take

41:18

them a couple of years

41:20

To really get their hands around it.

41:22

So well, these are big properties. You can't just

41:25

Massive I think it and you're

41:27

gonna have a bunch turnover. Yep. Oh,

41:29

yeah Yep, they're gonna be people who disagree with this

41:31

strategy I'm sure and they're moving

41:33

on and and the headhunters are all

41:35

around. Yep. So speaking of leech

41:38

and take a while Pete Heinz Yeah,

41:41

so this is a key executive at Bethesda. He's

41:43

been actually pretty vocal about

41:45

the exclusive thing and What

41:48

was the big bit that was a starfish starfields Bethesda right

41:50

starfield he left after he was pleading starfield

41:53

Yeah, and I think he might have been upset about some

41:55

of that stuff. He might also been exhausted Yeah,

41:58

he was there for over 20 years wasn't he? And Starfield

42:02

felt like it took 20 years to come out. Yeah,

42:04

this is the Skyrim company. These

42:07

guys always pop up at some other publisher. They

42:09

always do. He's not an old guy. You

42:11

know, I'm sure he still has. Maybe

42:14

he just wants to do something completely different. I

42:16

just read it as, oh, thank

42:18

God. Starfield's done. See

42:20

ya. Yeah, but a lot of people

42:22

read it.

42:23

But a lot of people read this as, oh, great. They bought

42:25

Activision's List and now we're going to certify

42:28

the entire gaming industry. And it's like, I don't think that's

42:30

what this was.

42:32

Well, but they didn't buy Bethesda. No,

42:35

they own Bethesda. Bethesda's part of AB.

42:38

No, they're part of Microsoft. There's ZennyMaxx.

42:41

I'm sorry, you're right. That's ZennyMaxx. Yeah,

42:44

yeah, yeah. I don't know. I don't think so.

42:46

No, I don't think so either. But I've heard that discussion and it's

42:48

like, guys, come on. You know. And

42:51

to your point, Microsoft has been a very good steward.

42:54

Yes. You mentioned LinkedIn,

42:56

but for GitHub, for Minecraft, and actually for ZennyMaxx.

42:59

Yes. And here's one of those things actually people maybe

43:01

don't think about too much and they should but in that same

43:03

custodial role, if you look at

43:05

a lot of the Microsoft first party games, especially the

43:07

Microsoft studio games, Halo, Gears

43:10

of War, Sea of Thieves is a great

43:12

example, Flight Simulator. They do an incredible

43:14

job of just supporting that thing for a long

43:16

period of time with extra content. And

43:19

it's not like, we need another 60 bucks. It's

43:21

like you bought this thing or you've subscribed to the game, whatever

43:23

it is, you get this stuff for years. And

43:26

this is the type of thinking I would like to see applied

43:29

to

43:29

games from these other studios as well, including

43:32

Bethesda's, by the way.

43:34

This business model where it's like, look,

43:37

we do the right thing and it rises all ships.

43:39

Like, let's do the right thing. You know, Sea

43:42

of Thieves should have been a non-event. Even

43:45

Redfall, for example, a game

43:47

that came out of the gate and fell on its face and then

43:49

hit itself with a rake.

43:51

They've kept updating that and

43:53

sort of like Cyberpunk. Supposedly,

43:55

this is like, it's like Apple Max. People tell me it's

43:58

better. And I'm like, I don't care. I don't care. I'm

44:00

sure it is. It could only be better. But

44:03

supposedly they're doing the right thing there as well. So

44:07

I think that's one thing Microsoft's good at. I think that's

44:09

part of the Microsoft culture. Actually, you haven't

44:11

heard much about the mobile

44:14

side of the deal

44:16

anymore. And I've always had a sense that it was a red herring.

44:19

I just don't see any way that

44:21

the tech giants can play

44:24

in mobile gaming. Mobile gaming

44:26

is a free to play, pay to win

44:28

business. It is about manipulating the company.

44:31

It's a crappy business. It's all... Here's

44:34

the problem. We could all name that

44:37

game that was the biggest thing in the world at some

44:39

time. Like Flappy Bird or Angry Birds

44:41

or Candy Crush or... Arm

44:44

Hill. Go down the whole list. Which

44:46

Microsoft now owns by the way. The

44:49

problem with those games is they're not sustainable.

44:51

So like Rovio had great success

44:54

with the first couple of Angry Birds games. Less success. Oh

44:56

man, they made movies. They thought they were gonna... That

44:58

was a franchise that was lived forever. They thought they were Nintendo. And

45:00

it's like guys, you made one game. Literally. They

45:03

might be the hell out of it. That's a problem

45:05

for mobile too. Right? So they own King,

45:08

but King is Candy Crush. Well, Microsoft

45:11

has never managed to make Minecraft mobile

45:13

work. They've tried and tried. That's

45:15

a perfect example. Minecraft is a weird

45:18

game because on a PC it looks old fashioned

45:20

and kind of 8-bit. Right. But for

45:22

a mobile device it's actually kind of hard. And it's not

45:24

because of the graphics. It's the

45:26

nature of the game. It's just controls. It's too open

45:29

world maybe. Or controls. Right.

45:31

Controls are part of the problem. I think so. Minecraft

45:34

is tough. The mobile thing is

45:37

tough. That's a tough one to crack. Any

45:40

company capable of suffering a class

45:42

action lawsuit should stay out of mobile. That's

45:49

just sort of the reality of it. The way you make

45:51

money in those games is

45:53

grumpy. It's not a good

45:55

business. I've argued for

45:57

a little while I guess.

45:59

that what Microsoft should have done was years

46:02

ago,

46:03

think about native mobile versions

46:06

of some of their top franchise games. I

46:08

think what happened, I'm just guessing here, but Microsoft

46:10

went down this thing and said, let's play to our strengths,

46:12

we've got this cloud thing, that's why Xbox is still around,

46:15

we'll do cloud streaming. And I

46:17

think the feeling there was like all technology

46:19

was all the problems that are here now, whether they're

46:22

cost or performance, or in this

46:24

case, like streaming, lag and

46:26

latency related, whatever it might be, those

46:28

will disappear because technology always gets better.

46:31

And I

46:32

think they did that to the detriment

46:35

of native mobile game development.

46:38

And I think that was a mistake because what we're finding

46:40

is yeah, maybe you might be right eventually,

46:43

but we're gonna be dead when that happens. And I don't care

46:45

if mobile gaming is good in the 3000s, so

46:47

I want it to work now. And I

46:50

think that was maybe a

46:53

strategy mistake that was necessitated

46:55

by the mandate they got

46:57

from the Della, right, it's gonna work with the cloud. Yeah,

47:00

I think that's just my guess. I mean, I don't actually know

47:02

what they did. It makes a lot of sense.

47:05

They just did, they really dabbled, you know, they

47:07

made those silly little Xbox around Halo

47:09

mobile games, the

47:11

Halo Spartan, whatever those things

47:13

were called, and they were fine. They

47:15

weren't Halo games, you know,

47:17

people wanted Halo.

47:19

Why did you give us something named Halo? It was like

47:21

the Windows RT of Halo.

47:23

I don't know.

47:24

Anyway, okay, so that's Activision Blizzard,

47:28

I guess.

47:28

Good, take a break. For all the time. Stop

47:31

talking. I know. I

47:33

was gonna say, for all of the time we waited, it's

47:35

like, now it's here, it's like,

47:37

I don't even know what to say anymore. It's over. You'll never

47:39

hear another Activision. I can't promise that.

47:42

It's over. Actually, I was gonna say Minecraft

47:45

is celebrating its 50th anniversary, and they announced

47:47

that it sold 300 million copies best-selling

47:50

game of all time. And I think you could make

47:52

a strong argument that would not have happened under

47:55

Mojang, that really, Mojang

47:57

took it as far as it could and by selling out in Minecraft.

48:01

When they handed this thing off to Microsoft, it was a Java

48:04

game. You know, right? Oh,

48:06

it still is. And it still is. It

48:08

still can be. I mean, no, but there's two versions now.

48:11

Yeah, there's Bedrock and yeah. I

48:14

want to talk about a new sponsor, if you

48:16

don't mind, and then we will be right back with lots

48:19

more. Paul Tharot in Mexico City.

48:22

This is great. I love this. I'm

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50:00

we go with the show. Paul,

50:05

Richard Campbell's. We must. As

50:07

we must. And you've been waiting for

50:10

it. You've wanted it. You've asked

50:13

it. Windows 11. I

50:15

heard of that. Has this been, I

50:17

have to say, I just saw an article that said Windows 11 adoption

50:20

has really been underwhelming and that

50:22

it has not been a huge success. Is

50:24

that fair? Yep.

50:27

Like everything else in life, you have to kind of asterisk

50:29

it, right? The

50:31

thing that we are literally two years

50:33

into Windows 11, like

50:35

this month. So this is a nice comparison. How

50:38

long did it take Microsoft to sell 400 million?

50:41

The user base

50:43

is 400 million, right? Is that the number? Yeah, 400 million.

50:45

So how long did it take Microsoft to get to 400

50:47

million active devices on Windows 10?

50:51

About a year. A year and three months,

50:54

I think. So less time.

50:56

How long did it take

50:58

Microsoft to have 400 million

51:01

Windows 7 PCs out in the world? I'd have to

51:03

do some math on that. But according to them, they were doing 20

51:05

million a month. So extrapolate

51:08

that out to, what is that, 10, 20 months? That's

51:11

less than two years. So

51:13

there you go. Actually that number was almost certainly higher

51:15

too because Microsoft was cooking the books

51:19

with Windows 7, which will come

51:21

up later in a future topic today too.

51:24

So yes, but the caveats

51:26

include such things as, okay, so is Windows 11 terrible

51:29

or whatever? Well let's think about

51:31

some of this stuff. First of all, Windows 10 came out after Windows 8.

51:35

So it had the same benefit Windows 7 had. Its

51:37

predecessor was terrible and everybody hated it. So

51:40

people were eager to move on to that thing.

51:42

Microsoft made Windows 10

51:44

free for everybody. Windows 7,

51:46

Windows 8, Windows Phone something, whatever that was. With

51:51

Windows 11, they artificially but they

51:54

contracted the available body of

51:56

machines to be upgraded with their hardware

51:58

requirements, right? something they decided

52:01

to do, that's on Microsoft. It was

52:03

CPM too. I mean, I thought it was a

52:05

pretty reasonable assumption. I did too, but

52:07

people still, you know, maybe it's

52:10

just people in our little enthusiast community, but

52:12

that was taken very badly. It was also, we'll

52:16

call it 8th Gen Intel CPUs

52:18

and newer that were accepted. So there

52:21

was a line there with the 6th and 7th Gen core

52:24

chipsets where you could make that argument,

52:26

like maybe they should have been allowed in.

52:28

So there were caveats.

52:32

You know, the other thing I think on this is they didn't

52:34

do a big push to sell Win11. They

52:37

never did. They just kind of limped it out.

52:39

So again, part, I think this

52:41

had to do with one of those other caveats, which is

52:43

that Windows 11 arrived right at

52:45

the end of the pandemic PC buying

52:48

boom following two straight quarters

52:50

in which PC sales fell

52:52

off a cliff.

52:54

And it was nothing they were going to do to change that Windows 11.

52:57

They clearly wanted to make some,

52:59

they're not architectural. I don't

53:01

want to call them that, but they made some

53:04

low level changes that required

53:07

them or not, but it caused them

53:10

to, or it allowed them to make some UI changes

53:12

in some cases that created this system

53:14

that was missing features from Windows 10.

53:17

And they knew that they would get to that over the next

53:19

year or two, which I think they pretty much have. I

53:21

mean, by now.

53:23

Also just the natural

53:27

business refresh

53:29

cycle, which I know is different for all businesses, but

53:31

there are better years than others. And I don't know

53:33

what it was for Windows 10, but it was very clear

53:35

heading out of the pandemic

53:37

that no one was spending money. Yeah. Not

53:40

a time to buy new machines. Yeah.

53:43

Windows 11 may ultimately end up being a

53:45

weird outlier in the history of Windows

53:47

in the sense that if they do replace it with Windows 12,

53:52

it may never become the most used version of

53:54

Windows in its.

53:55

It'll fall neatly into the same category,

53:58

just an eight. between

54:01

versions, right? We didn't do it in every

54:03

other version thing for 20-something years.

54:07

That's right. Yeah, so it's like what Apple

54:09

would call an S year release,

54:11

right?

54:13

So, like, whose fault is this? I don't

54:15

know. But I look this up because

54:17

the numbers thing is interesting to me.

54:20

You have in the Terry Meyerson years

54:22

at Microsoft when he ran Windows, and they did

54:24

Windows 10, right? He came up out of Windows Phone,

54:27

very transparent. They

54:30

announced Windows 10

54:32

usage milestones possibly a dozen

54:35

times or more over three years. 200

54:37

million, 270 million, 300 million, 400 million, 600, 700, 800, 800, 800, a billion,

54:39

a billion, you

54:44

know, he kept going like that, right? If

54:46

you look at Panos Panay and Windows 11, and

54:48

how many times they announced sales or usage

54:50

milestones for that product, the answer is zero,

54:53

not even once. And is

54:55

that a personality thing

54:57

between him and Meyerson

55:00

maybe? I mean, the only number we associate

55:02

with Panos Panay is $900 million,

55:04

the write down for Surface RT, right? But

55:07

I don't actually think that's it. I really believe that at

55:09

the feet of Panos as much as

55:12

somebody convinced them that RT was going to be the big seller.

55:15

Microsoft with its history of...

55:18

They also needed to take

55:20

a swing at Intel.

55:21

It was a less expensive

55:24

way to take a swing at Intel, but Intel

55:26

did pony up with the atom at that point.

55:29

That's a push. It was

55:32

a swing and a miss. But

55:34

it was at least an answer to, I need a lower

55:36

power consumer compared to the P4 or

55:38

the Core 2. That

55:40

was Terry Meyerson's big thing. That's why

55:43

Windows and ARM exists. He was

55:45

very upset about... You need to

55:47

negotiate in a position.

55:49

Right, right. And it's like, I can go

55:51

without you. Don't make me.

55:55

It was a good play. Yeah.

55:58

It's a good job.

55:59

Yeah,

56:02

I don't know. I don't know. I just

56:04

don't know. This is a story as yet to be written, I

56:07

guess, but I, you know, Windows 11,

56:09

like, is it successful?

56:14

No, it's a tough one. Well, at

56:16

what level, right? I mean, so Windows 11 as

56:19

the baseline for what Windows will be in the future,

56:21

right? It is a more

56:23

modern looking system. There

56:26

have been improvements under the covers that aren't coming to

56:28

Windows 10, again, artificially, but whatever, they

56:30

just aren't. Plus,

56:32

they've pulled a whole lot of features that we intend

56:34

that we needed up. So,

56:37

you're coming to a consolidation point. I just think

56:39

you're taking it long enough. Yes. And

56:42

now you throw in the large language model disruption. 12 is

56:45

going to appear before 11 adoption

56:47

becomes important.

56:49

So, the thing that the one piece

56:51

I'd really like to know, and Leo

56:53

mentioned Figma recently on the show,

56:55

and the thing that's interesting about Adobe

56:57

trying to buy Figma was that it was challenged by

56:59

regulators. They were going

57:01

to face a big fight, very similar to what Microsoft

57:04

did with Activision Blizzard.

57:05

And then AI happened, and they were like, you know what?

57:07

Let's do this and stuff. By

57:10

the way, we should say, they've not publicly said we're abandoning it. But

57:13

they haven't talked about Figma. They

57:15

just had Adobe, their big Adobe Max conference. They

57:17

didn't mention it. Not even one.

57:19

But what did they talk about a lot? So,

57:23

I wonder with Windows 11 if the plan

57:25

wasn't originally a little different, because

57:27

remember, this was two years ago.

57:29

But 18 months ago,

57:31

all of a sudden, everyone got new marching orders

57:34

at Microsoft around AI. And

57:36

I think the Windows we're going to get now in the future

57:38

is going to be a little different. Not

57:41

a little different, a lot different, right? But maybe

57:43

what that original plan was, I don't know.

57:45

I think the original plans for Windows 11, you

57:48

know, going forward through time, were quite

57:50

subdued and uninteresting.

57:54

And that I think this AI thing is supercharged

57:56

that a little bit, and we're going to get more interesting

57:59

discussions out of this. I mean, some of these features

58:01

will be stupid, but we're going to get

58:03

an AI. We already have.

58:05

There is background removal and paint. It

58:07

supports transparencies now. It's going to support

58:09

layers.

58:10

I used background blur in the photos

58:12

app the other day. I mean, I shouldn't be impressed

58:15

that an app on a computer could work

58:17

as well as a tiny app on a phone, but honestly,

58:19

it's pretty good, right? That's

58:23

great. I mean, these are apps and

58:26

systems that we're not going to get a lot of attention

58:28

otherwise. And so AI

58:31

has infused Windows with a

58:33

new sense of urgency. And

58:36

so yeah, I mean, Windows 11 ultimately

58:38

might be a little bit of a lame duck.

58:40

I get to remember too, I mean, Windows

58:43

was late almost for like two years.

58:47

Microsoft was walking, Windows

58:49

did not have representation on the

58:51

senior leadership team at Microsoft for almost

58:54

two years.

58:55

Actually, no, excuse me, for almost three years because

58:57

Panos didn't get on until almost a year later.

59:00

So this

59:02

situation has shifted and I, Windows 11,

59:05

I hate to make this comparison because

59:08

people incorrectly often describe

59:10

Windows Millennium Edition as the worst version of Windows

59:13

ever made. That's not fair and it's not true,

59:15

but one of the reasons it's not

59:17

true was it's the system

59:20

where Microsoft actually first released a

59:22

lot of the technologies that we later associated with

59:24

Windows XP. This was

59:26

a system that could recover from a driver failure.

59:29

Before then, if you installed a bad driver, you

59:31

were reinstalling the operating system. You couldn't get out of

59:33

that.

59:34

That driver, I think they call it a driver,

59:36

failover, driver, whatever it is,

59:38

that debuted in Windows Millennium Edition,

59:41

right? And so in some ways, these little

59:43

dribs and drabs of AI that we see now in Windows 11

59:47

should be viewed maybe like that.

59:50

When we later look back at the pre-AI

59:52

world for Windows, that

59:55

world's going to be Windows 10, not Windows 11.

59:58

Windows 11 is going to be where it started. And honestly,

1:00:01

I think the modern UI is pleasant

1:00:03

and nice and less

1:00:06

dated than

1:00:07

this UI that they created for Windows Phone and

1:00:09

put on a PC desktop. It's all sharp

1:00:11

and angular with live tiles. It doesn't make any sense. And

1:00:14

it just, I don't think that thing aged well at all. I

1:00:17

know there's a billion people still using it, so

1:00:19

sorry if you disagree. But it's,

1:00:22

I think Windows 11 will

1:00:25

be, I hope Windows 11

1:00:27

will be better regarded in the future

1:00:30

than it is now because I know a lot of people kind of resent it

1:00:32

in our little community, right? And we still get back

1:00:34

to the, like, why does this operating system

1:00:37

exist? Like, it would be the last

1:00:39

version. We know how important 11

1:00:41

is to them because it is 10.1. Right.

1:00:44

Right.

1:00:45

There you go. That's right. And

1:00:48

maybe Windows 12 is really 10.1.1 and that's where we know that it's going to be the big

1:00:50

one.

1:00:50

Yeah. No. But

1:00:53

it's, it always felt to me like, oh,

1:00:55

Mac OS released no version of the OS, so

1:00:57

now we need to. Yeah. Right.

1:01:01

Right. So Apple used Mac OS X

1:01:03

for, how are we, 15 years away? They

1:01:05

literally released a new version every

1:01:08

year. No, but they called it Mac OS

1:01:10

X forever and then, like,

1:01:13

in recent years, it's been 11, It's

1:01:15

not comparable to Windows 10 and 11. I

1:01:17

don't think. No, but the timing was the same

1:01:19

and it's possible. Yeah, I know. Yeah,

1:01:21

I know. That micro. Micros, they're technical

1:01:24

enough to know that's not comparable. But they're

1:01:26

also bad marketers. Oh, they're 11. We

1:01:28

got to be 11. We got to go to 11, too. I

1:01:30

looked at a 12. I'm surprised they didn't see

1:01:32

that. Well, that's what they did with turn. Remember

1:01:35

they said 9, 8, 9, 7, 8, 9. Right.

1:01:39

Yeah. So all you had was 10. I

1:01:42

don't know. There was a lot of reasons to skip 9.

1:01:44

Like, it needed to be skipped. Was

1:01:47

there a 9? Was there a Windows 9? No,

1:01:49

but there was, there was 95 and 98. And

1:01:52

you don't want to get into those weird versions. You've

1:01:54

got a new version never checking. We've got problems.

1:01:57

Sometimes it's also because the number is unlucky in China.

1:02:00

of nine numbers. Right. But

1:02:02

eight's a lucky number. They were going to put the Windows logo under

1:02:04

a lion and that didn't work out. I

1:02:06

also wonder what happened with the Volume License Agreement.

1:02:10

One of the drivers for when VISTA was released

1:02:12

was the five-year requirement for the Volume License

1:02:15

Agreement. Right. And 10 came

1:02:17

out in 2015. And

1:02:20

so by 2020, they were there and we got 11

1:02:22

in 2021. It

1:02:26

may have just cleaned up a bunch of contractual problems.

1:02:29

Yeah. Yeah.

1:02:31

I mean, I

1:02:34

sort of hope they go back to this three-year

1:02:36

plan and it seems like we'll find out next

1:02:38

year in case, right? Yeah.

1:02:40

Well, it's not going to be a Windows 13. I'll

1:02:43

catch you that one. Boy.

1:02:46

Right. Right,

1:02:47

of course. Although there was a macOS 13,

1:02:50

wasn't there?

1:02:51

I think they went right to 13. I think they went right to 13.

1:02:53

I saw 13. I can't remember. I

1:02:55

bet they did.

1:02:56

Well, we're right now. We're at macOS 11. No,

1:02:59

no, no. Are we on like 14 or something? I

1:03:01

thought we're on 14 or 15. No,

1:03:04

you got me. We're in Sonoma 14.0. Yeah.

1:03:08

Yeah. But it's not called macOS. Maybe

1:03:10

it is called macOS. Well, it's just macOS. Right.

1:03:14

But the version used to be 10.1, 10.2, 10.3. Right

1:03:17

now it's 11, 12, 13, 14. Yeah.

1:03:21

I mean, clearly they want everybody to be confused

1:03:23

and they don't know what Microsoft is. Microsoft

1:03:27

was talking about this is the last

1:03:29

version. It's like, well, why do you call it 10? It's

1:03:31

called Windows.

1:03:32

Right. You know, it's called Windows.

1:03:34

The problem is also though that

1:03:37

software and people both want to

1:03:39

know what version you're on. Yeah.

1:03:42

Well, you still have to have to do that with iPad and it's very

1:03:44

confusing. We have to say things like

1:03:46

it's the 10th generation iPad. Leo,

1:03:49

listen, you understand my mania

1:03:51

well enough to know that we can have versions

1:03:53

all you want, but it doesn't matter. It doesn't tell me what's

1:03:55

on your PC. That's what I'm talking today. Yeah.

1:03:58

I wrote an article today.

1:03:59

they actually, I don't think I linked to it, about

1:04:02

this thing that's happening with system components in Windows 11,

1:04:05

and it's in 23H2. And

1:04:09

I was gonna use another computer to take screenshots

1:04:11

of it, because it's set up for that. And that PC,

1:04:13

which is on 23H2,

1:04:15

does not have that interface and settings. It's

1:04:17

only on one of the two computers I have here. And

1:04:20

that's what my life is like today. So,

1:04:24

versioning, I mean, this

1:04:26

is almost like a passive aggressive response

1:04:29

to the people who want everything clear

1:04:31

and versioned correctly. It's like, well, screw you,

1:04:34

we'll do the versioning, but then we're just gonna screw around

1:04:36

with what's in it. You'll never know. We're

1:04:39

gonna do A-B testing to everybody, basically.

1:04:41

So, yeah, that's our world.

1:04:45

Anyway, I can't

1:04:48

speak of everybody. I like Windows 11. I

1:04:51

was shocked by some of the regressions

1:04:53

they made in the first version. I was surprised

1:04:56

by how little they moved the needle in the second

1:04:58

version.

1:04:59

And then I've been shocked over the past year to watch them

1:05:01

change it again and again and again and

1:05:03

again every month. Like, it's been a roller

1:05:05

coaster.

1:05:08

So, the press towards making

1:05:10

it acceptable for enterprise has kind of driven a

1:05:12

bunch of that. But, well,

1:05:14

people I'm talking to are looking at it incredulously.

1:05:17

Like, why would I do this? This

1:05:19

is going to cost me so much money

1:05:21

and support.

1:05:23

By the way, and for what?

1:05:26

Well, so enterprises

1:05:29

will not accept the uncertainty and

1:05:31

chaos that I've been talking about for months.

1:05:33

They will not accept this. They

1:05:36

will have

1:05:37

policy to mold this

1:05:39

thing in some degree. And

1:05:41

one would expect that there will be in a Windows 11 enterprise

1:05:45

and that this tomfoolery won't exist.

1:05:47

It will be a Windows 11 long-term servicing.

1:05:50

Yeah, that'll be easy. They don't have right now. Yes,

1:05:53

yep, yeah. No, that stuff will happen. Or

1:05:57

it should happen. Okay, right, I'm sorry. It

1:06:00

will because Microsoft, like we discussed last

1:06:02

week, is very responsive to feedback and no

1:06:04

more responsive than through their enterprise

1:06:07

customers. Right. But if they're going to be responsive to feedback,

1:06:09

their feedback is, I don't want this. I'm going to keep using 10 until

1:06:11

you show me a feature actually. Actually, right.

1:06:14

So that's something else we should have talked about. So one thing

1:06:16

I looked at was the Windows

1:06:18

version usage charts for

1:06:21

these systems at relative positions in

1:06:23

their life cycles. Right. So we're two

1:06:25

years into Windows 11. Windows 11,

1:06:27

obviously two years ago, started at zero and

1:06:29

then went up to 400 million or whatever,

1:06:32

or in the words of start counter, some percentage, 23.6

1:06:35

or something percent of the market. Right.

1:06:37

The other 78 or whatever percent is

1:06:40

all Windows 10, basically. So if there

1:06:42

are 400 million people on Windows 11, that

1:06:44

means there are a billion on Windows 10. The

1:06:47

thing that's interesting about Windows 10 over the past two years

1:06:50

is that their usage is pretty flat.

1:06:53

It has gone down a little bit over two years,

1:06:55

but less like 8%. It's

1:06:57

a very small number.

1:07:00

So that's very interesting. If you go and look at Windows 10,

1:07:03

when it was two years in, it was on a sharp

1:07:05

usage spike.

1:07:07

But Windows 7 was the most dominant

1:07:09

system at that time.

1:07:10

And Windows 7 was on a sharp downward

1:07:12

spike. So I didn't

1:07:15

look ahead to see when it, they

1:07:17

crossed paths. I didn't want to. You didn't even mention 8

1:07:20

in that. No, because 8 did not factor

1:07:22

to that. Right. So my

1:07:25

thought is that the 400 million Windows 11 are

1:07:27

consumer machines. Because

1:07:30

the average people won't buy a new machine

1:07:32

with an old OS. It comes with 11. But

1:07:36

the enterprise is holding steady

1:07:38

because they are still installing 10

1:07:40

on their, as they were. So among

1:07:43

the differences between Windows 10 and Windows 11 at

1:07:46

two years in is enterprises were adopting

1:07:48

Windows 10. They could not wait

1:07:51

to get off of or not use Windows 8. So that

1:07:53

helped. So you saw that in the usage

1:07:55

share of Windows 7 going downhill very quickly.

1:07:59

10 usage not going down quickly today, I think

1:08:02

reflects the situation you just described, for

1:08:04

sure. But this creates an interesting problem

1:08:06

because remember, despite the fact that

1:08:08

Windows 7 and Windows 10 were doing this a two years in,

1:08:11

by the time Windows 7 support ended in

1:08:13

whatever year, does anyone remember 2019, I guess? There were still

1:08:16

enough people, enough

1:08:19

businesses, on Windows 7

1:08:22

that Microsoft created a three-year program where you could pay

1:08:24

them for extended support.

1:08:26

Right?

1:08:27

Now the question we have is,

1:08:29

Windows 10 supports going in two years,

1:08:31

supposedly. Well that's right.

1:08:34

So when Windows 10 was released,

1:08:37

Windows 7 still had four years left

1:08:39

on its life cycle. When Windows 11 was

1:08:42

released,

1:08:43

Windows 10 had four years left

1:08:45

on schedule.

1:08:46

Windows 10 as a percentage is not

1:08:48

just higher today than it was for Windows 7

1:08:51

back at that same time period. It's way

1:08:53

higher, like way higher. And holding. And

1:08:56

holding, exactly. It's inconceivable.

1:08:58

I would have said before I sort of looked at that and thought

1:09:01

about it, I would have said, we'll see what they

1:09:03

do. History shows us they typically

1:09:05

extend support for businesses, for XP they did

1:09:08

it for 7. I think the situation for

1:09:10

Windows 10 is going to be even worse. Now

1:09:13

I do. I don't

1:09:16

see how they can't. In fact, they

1:09:19

should just announce it now. They should just

1:09:21

announce it now. Yeah, I know. And I think

1:09:23

they're thinking hard on exactly that problem.

1:09:26

Then you throw in what's happening

1:09:28

in the v-neck stack. I know.

1:09:30

I don't. Because we're

1:09:32

coming into a crush where it's just like, real estate

1:09:35

can't change fast enough. And even if we pushed

1:09:37

hard to do it, it's two or three years

1:09:39

down the road and 12 will

1:09:42

be coming. I think they have to do it. And

1:09:45

if there had been something, I

1:09:47

think last week we talked about this notion of an AI

1:09:49

killer app for Windows, right? And

1:09:51

the lack of one. The fact that they

1:09:53

had a special event that was about AI

1:09:55

and didn't have a single killer app from them

1:09:58

or a third party.

1:09:59

One year from now, if that's still the case, and we've

1:10:02

done all the processor revs and MPUs

1:10:04

are everywhere, and

1:10:05

they've got no one buying new PCs

1:10:07

because nobody cares and there's no reason to do

1:10:09

it,

1:10:10

I don't know what the story becomes because at that point

1:10:12

you have to support Windows. There's no reason

1:10:14

for people or companies

1:10:16

to upgrade to some

1:10:19

new system. It's not going to do it. And the TPM2

1:10:21

isn't going to do it. That's

1:10:25

not a good enough reason. But

1:10:27

it's what CoPilot is. If

1:10:31

it is. That's the problem. That's

1:10:34

the problem. Well,

1:10:35

you know, this is where you see the maneuvering

1:10:37

going on now where they're trying to say,

1:10:40

it's just CoPilot.

1:10:42

Yes. This

1:10:45

is a game playing with the brand to

1:10:47

get you to be able to do that without

1:10:50

necessarily knowing exactly what you're buying. And

1:10:52

the weird thing is, I bet we're going

1:10:54

to see more compelling cases for MPUs

1:10:58

from Microsoft 365 than

1:11:00

we're going to see from Windows. And that

1:11:02

gets into a kind of a squirrely issue

1:11:04

because we usually think of new

1:11:06

PCs as either just being necessitated

1:11:08

by some passage of time or there are some

1:11:11

exciting new features in Windows. And

1:11:14

it will support an MPU and there'll be AI

1:11:16

features that require or work better with it.

1:11:18

I don't think they're going to be that exciting on Windows.

1:11:21

Maybe it'll be third party stuff, who knows. That

1:11:23

was always the assumption is the ecosystem. But

1:11:25

part of the figuring you're seeing with Microsoft CoPilot

1:11:28

is to make it not clear whether

1:11:30

you were getting 365 CoPilot or Windows

1:11:32

CoPilot. You don't care

1:11:35

because ultimately

1:11:37

the office team doesn't mind if you buy

1:11:39

new hardware either. That is fine. Well,

1:11:42

that

1:11:43

might become a selling point. I mean, if you

1:11:45

have a Microsoft 365 subscription, you're

1:11:47

paying for the AI VIG there.

1:11:50

Yeah, and what is the price will

1:11:52

likely go up.

1:11:54

So it's like, hey, if you're using old hardware,

1:11:56

it's 50 bucks a seat or 60 bucks

1:11:58

a seat. But if you use. new hardware

1:12:00

with the NPU mode, it's 30 bucks a season.

1:12:04

Boy, paying

1:12:04

more per month for a Microsoft license

1:12:07

of some kind than I do for my smartphone does, or

1:12:10

it gets into a weird territory.

1:12:13

And now you get into the value proposition, like how much does this

1:12:15

have to help me before that money is trivial? And

1:12:18

at the same time, it's like, hey, we got to get new

1:12:20

hardware anyway. Let's get the new hardware

1:12:22

with the NPU and the new OS,

1:12:25

and we offset those costs over a few months

1:12:27

with the price decrease and the cost

1:12:29

of the AI tools. See, this is the difference between

1:12:32

a corporate environment and a sole proprietor

1:12:35

like you and me, Paul. Yes.

1:12:38

Yes. There's no way to justify that spend.

1:12:41

In a corporation, it's different. You got data

1:12:43

analysts, you got a lot of mediocre middle

1:12:46

management people doing... Of course, you got teams of people that can

1:12:48

use it and teams of people that can't. But

1:12:51

it's sole proprietors. We can't use this crap.

1:12:53

Remember, this is an example Richard will

1:12:55

appreciate. When Microsoft came out

1:12:57

the gate with Longhorn,

1:13:00

they were promoting this new app model and .NET

1:13:02

and Avalon and all that stuff. And

1:13:05

it was all going to be Longhorn only. And

1:13:07

through a combination of delays

1:13:09

and their customers and developers complaining,

1:13:11

they

1:13:12

later announced that, actually, we're going to bring this stuff back

1:13:14

to XP as well. We're going to make this... It's

1:13:16

not just going to be for Longhorn. I

1:13:18

wonder when you think about it, if there's nothing

1:13:20

in Windows 11

1:13:22

that makes a

1:13:23

compelling case for AI, but we are going

1:13:25

to be selling these computers with MPUs.

1:13:28

And most of the features you're going to get, most of the benefit

1:13:30

you're going to get out of it are going to come out of apps,

1:13:32

which may be in Windows, maybe not, maybe

1:13:34

in Microsoft 365, maybe from Adobe or

1:13:36

third parties.

1:13:38

Why not just bring that stuff back to Windows 10?

1:13:40

Yeah. Right?

1:13:42

I mean, why not Microsoft 365 on Windows 10 with

1:13:45

your extended support agreement for three

1:13:47

or five years or whatever it is on Windows 10,

1:13:49

you have an MPU in the computer, you've downgraded

1:13:52

to that Windows 10 operating system, maybe

1:13:55

the built-in apps in Windows, there's no reason they can't

1:13:57

run on Windows 10 if they don't already. The transparency...

1:13:59

nonsense I talked about in paint or the background

1:14:02

blur and photos or whatever else they're adding,

1:14:04

right? Why not bring it to Windows 10? Isn't it

1:14:06

really just about that stuff and not an

1:14:09

arbitrary version of Windows? It's the license that matters.

1:14:11

Who cares? Right? And

1:14:14

one could argue, you know, they could just

1:14:16

stick with Windows 10 Enterprise because

1:14:18

Yeah, there you go. Yes, they're there.

1:14:21

And Windows 11 is a consumer only edition.

1:14:24

Yeah, yeah,

1:14:25

I actually kind of like that idea. But

1:14:28

now I can also see they're going to have to put a

1:14:30

new version out sooner or later. 2026, looking

1:14:34

at the five year time cycle against when 11. Right.

1:14:37

And so you're

1:14:38

going to need it anyway. You

1:14:40

have to Windows work

1:14:43

groups and Windows non work groups 311 was

1:14:45

Windows 95. But without the new UI, right?

1:14:48

You had all the technical underpinnings in there. There's

1:14:51

no reason they couldn't do the same with AI

1:14:53

and Windows 10. Right? Sorry.

1:14:55

Yeah, they could but they haven't. Right?

1:14:57

We're already Well, to our knowledge, 11. 11 exclusive

1:15:00

features. Yeah. Okay.

1:15:03

We'll see.

1:15:04

Okay. That's all I don't know what to

1:15:07

say. I accept the thing I say all the

1:15:09

time. We'll

1:15:10

see. Yeah. We have had

1:15:12

several Windows Insider Program builds

1:15:14

over the past week, some

1:15:17

of which are kind of interesting. There

1:15:19

was a beta bill last Friday. And I

1:15:22

don't know that this was called out in our article per se. But

1:15:24

this is another one of those interesting examples of

1:15:27

Microsoft bowing silently to the new EU

1:15:30

laws, right?

1:15:31

And in the EU, Microsoft will

1:15:35

require some consent things that's related

1:15:37

to privacy, one thing, but then they're

1:15:39

going to do that thing where we

1:15:42

are this came out earlier that those

1:15:45

underlying system components aren't going

1:15:47

to automatically launch edge, they're going to

1:15:49

launch your browser of choice, they're going to respect your

1:15:51

choice in the EU because

1:15:53

the EU is demanding that same kind of thing.

1:15:55

They're also going to change

1:15:57

the way the start menu works there. you

1:16:00

don't agree to do certain things, then it's not gonna make

1:16:02

recommendations to you, which is, yeah,

1:16:05

it's not great basically, in

1:16:07

the start menu, so that's kind of interesting. Like we're

1:16:09

seeing them starting to test the stuff

1:16:13

in the Insider program, so that's kind of neat. Oh,

1:16:15

I did put it, no, it's good. So

1:16:17

last week, I guess, there was

1:16:19

a release preview channel built. Remember, this is the one

1:16:22

we sort of believe is, this is 23H2, right? And,

1:16:26

oh, and this is the feature I just mentioned, where I saw it on one

1:16:28

computer, but not another, like

1:16:30

a controlled feature release, which is actually

1:16:32

kind of uncontrolled feature release, when you think about it, but

1:16:34

whatever. They're separating

1:16:37

in the UI, this notion of things that are

1:16:39

system components from things that are apps.

1:16:41

And they're doing it arbitrarily, but the idea here

1:16:44

is that a system component is something like

1:16:46

Game Bar, or

1:16:49

the Microsoft Store,

1:16:50

that it comes with Windows, so it's like an Inbox

1:16:53

app, but cannot be uninstalled.

1:16:56

I think there's another, they haven't documented

1:16:59

this, so I'm guessing here, but I think there's

1:17:01

another differentiator in there that has something

1:17:03

to do with that last thing I just talked about this. These

1:17:06

are parts of the system that operate under the covers,

1:17:09

interoperability between different apps

1:17:11

or systems, and they

1:17:13

can't be removed for that reason. If you cut out

1:17:16

part of this, it would be like cutting IE

1:17:18

out of Windows 95 OSR2. Like, artificially

1:17:21

or not, it breaks the system and things don't work anymore,

1:17:23

and I think that might be what this means.

1:17:25

So it looks like they're moving

1:17:29

at least six of them, and we'll see, it could be more later,

1:17:31

system components out of that installed

1:17:34

apps UI and settings and putting them in their

1:17:36

own place where people will never find

1:17:38

them, because honestly, you can't do anything with them

1:17:40

anyway, who cares? You know, speaking of apps

1:17:43

appearing on your machines, yeah,

1:17:45

so Patch Tuesday last week, Microsoft

1:17:48

pushed the Azure Arc

1:17:50

install to all Windows Server

1:17:53

boxes. Yeah, but as we communicated

1:17:55

privately, that didn't impact anybody and it didn't

1:17:57

make anyone mad, so no big deal.

1:18:00

Next is a YouTube album.

1:18:02

That's exciting. Right

1:18:05

up until the toast popped up. Why

1:18:07

do I hear guitars? Well,

1:18:11

didn't they put that Wilco song with

1:18:13

the Happy Days on Windows 95? It

1:18:16

was on the CD. It wasn't installed on the hard drive.

1:18:21

But what happens, Richard, explain this. The

1:18:24

Azure Arc. Yeah, I don't even know what Azure Arc

1:18:27

is. What is that? Azure Arc is their monitoring

1:18:29

tool so that you can use basically a cloud

1:18:31

dashboard not

1:18:32

only to manage all of your virtual

1:18:34

machines and so forth in Azure, but

1:18:37

also in other clouds like AWS

1:18:39

and Google Cloud and on-premises.

1:18:42

And so some bright star inside

1:18:44

of Microsoft decided that everybody should have Arc

1:18:47

ready to go on

1:18:48

any machine. And

1:18:50

so included in the Security

1:18:52

Patch Tuesday update for servers,

1:18:55

they positioned the installer

1:18:58

for

1:18:58

Arc. Now they didn't install

1:19:01

it. They just

1:19:02

put the file on the machine. And again,

1:19:05

I could live with that. This is the managed environment.

1:19:08

You went and you RDP'd

1:19:10

into your server, your server.

1:19:14

And

1:19:15

like you were running a regular version

1:19:17

of Windows 11 with all the stuff,

1:19:20

a toast would pop up to tell you, Arc's ready

1:19:22

to install. I

1:19:24

mean, the MVPs went nuts. And

1:19:28

the – and you

1:19:31

know, go read the Reddit on this. They're all delighted.

1:19:34

Like

1:19:34

toast popped up on my server. Like I'm really –

1:19:37

I'm glad this is finally impacted in an audience that

1:19:39

cares and that they'll listen to because

1:19:42

the behavior on the consumer versions of Windows

1:19:45

is so insidious

1:19:47

and is even worse than I described with that OneDrive

1:19:49

software. It's actually escalated since then, if you

1:19:51

can believe that.

1:19:52

But yes, someone needs to –

1:19:55

someone who they will listen to needs to tell them

1:19:58

this is unacceptable behavior.

1:20:00

Like what are you doing? I'm fascinated

1:20:03

by if they just installed it and didn't

1:20:05

say anything would that have been better or worse? Like

1:20:09

are they supposed to... That would have been worse. Well,

1:20:12

and in general, yeah,

1:20:14

installing things on my machine and not telling me is bad.

1:20:17

A pop and toast on my server is bad, period,

1:20:19

full stop. Yep. But

1:20:22

it happened.

1:20:22

I also, in OneDrive, I'm not going

1:20:25

to reiterate my OneDrive issues, but I,

1:20:27

on some machine, again, I'm on 23H2 because I'm trying

1:20:29

to, you know, I'm writing the book and whatever.

1:20:32

And I noticed, again, it silently

1:20:35

turned on folder backup, which I don't want.

1:20:38

So when you turn it off now, you go to this UI with

1:20:40

the little on off switches for each of the folders. So

1:20:42

you go to the first, this is desktop on, you're like off. A

1:20:44

pop up comes up. It's like, hey, why didn't you turn this off?

1:20:47

You mind taking a survey? There's a bunch of questions. And

1:20:50

I'm like, what is this? And I'm like, okay,

1:20:52

maybe they actually heard some feedback that people don't

1:20:54

like this. Okay, good for them. So I canceled out

1:20:56

the box and then I went to the second one. Second

1:20:59

one was documents, documents off. Same

1:21:01

survey came up. Like, are you kidding me? So I dispensed

1:21:04

with that. I went to the third one,

1:21:06

turned it off.

1:21:07

Survey comes up. I'm like, oh dear God, what is wrong

1:21:09

with you? So I finally got it all off, closed

1:21:13

the window, toast pops up for the

1:21:15

side, says, hey, would you like to try to unfold

1:21:17

the backup? It's a cool new feature of OneDrive. It

1:21:20

is a miracle. I did not hum this thing

1:21:22

off of the balcony of this apartment. Like are

1:21:24

you kidding me? I said, okay. I'm

1:21:26

a computer. Yeah. Don't tell

1:21:28

me that's not malicious. That's

1:21:31

it. Yeah. I still think it's indifference.

1:21:33

Like they're just doing it. Oh God. Yeah. This

1:21:36

is the whole thing, this idea of negative option billing where

1:21:39

your local monopoly of choice just

1:21:43

gives you something or push something on you and you

1:21:45

have to call them to make it go away. Right.

1:21:48

Or it's done with the software. It's

1:21:50

like, oh yeah, you can delete the

1:21:52

file. You know. You can't stop

1:21:54

the toast. That's not a thing. No, we're

1:21:57

not selling. We don't have that. That's

1:21:59

going to be in windows 12. Windows 11. You know

1:22:01

it's like if you had like a cable company

1:22:03

monopoly and they keep contacting you to feedback,

1:22:06

hey how are we doing? What does it matter?

1:22:08

I can't stop

1:22:10

you from doing what you're doing. What's

1:22:13

the difference? Anyway, okay sorry.

1:22:15

Oh yeah, all of my life is suffering and

1:22:17

I blame you. Right.

1:22:20

Let me take a break right here before you move on.

1:22:23

Oh okay, yeah. If you don't mind. No I don't mind. I

1:22:25

got nothing else to do. I'm sitting here. No that's all

1:22:28

you're doing. I'm trying to provide

1:22:30

this plan over here. Nothing's

1:22:33

happening. My ferns have inspired you. I

1:22:35

like that. Yeah ferns make me jealous.

1:22:37

They're so green. I would like every time that you came

1:22:39

back on camera there were more plants. That is

1:22:41

actually happened.

1:22:46

We did a bit like that. We fully gathered

1:22:48

all the plants in the studios and every time we came back

1:22:51

it was more and then finally I took off my clothes. I

1:22:53

don't remember that.

1:22:55

Anyway, it was a day that lived

1:22:57

in infamy. Suddenly the palm leaves became

1:23:00

way more important. Yeah,

1:23:03

strategically placed ferns. Right.

1:23:05

It's a big deal. But before

1:23:07

we do that and that's a good idea. I'll

1:23:10

see if we can get some more. You know it might not be

1:23:12

in this case it might not be plants. It might be bric-a-brac.

1:23:15

I'll be swallowed by bric-a-brac.

1:23:18

Loving doesn't last, cooking does. No,

1:23:22

mom is not that. She doesn't have live,

1:23:25

love, laugh stuff anywhere. No slogans

1:23:27

anywhere in the house. Okay. No,

1:23:29

she's a little more than that. But

1:23:32

there are a lot of cookbooks which fortunately

1:23:35

have become very handy for propping

1:23:37

up

1:23:38

microphones and

1:23:39

cameras and all that stuff. I didn't bring enough

1:23:41

tripods. We've all been there. Our

1:23:44

show today brought to you by ladies and gentlemen,

1:23:46

the great folks. Actually, I'm really thrilled

1:23:49

to have them on Windows Weekly. They've been sponsoring

1:23:51

security now for years. Thinxed Canary.

1:23:55

We use the Thinxed Canary. We have one in the studio. I don't

1:23:57

have one here. Mom didn't really need the security.

1:23:59

But

1:24:00

this is why I think canary is important. We

1:24:04

all work on perimeter defenses,

1:24:06

right? Keeping the bad guys out of our

1:24:08

network. And for some reason,

1:24:10

somehow they keep getting in like cockroaches.

1:24:13

So how do you know if you

1:24:16

have an intruder? Because what they do

1:24:18

these days, on average, they're, they're wandering around in

1:24:21

your network 91 days before they actually

1:24:23

are spotted. And what

1:24:25

are they doing? They're exfiltrating data so they can

1:24:27

blackmail you. They're looking for all the places

1:24:29

you back up. So when they trigger their ransomware,

1:24:32

you're in deep trouble. There's

1:24:34

lots of things they do. They love to hang

1:24:36

around in your network like cockroaches. The

1:24:39

things canary, that's the canary in

1:24:41

the coal mine, get it? That

1:24:43

will let you know that somebody's

1:24:46

snooping inside your network. You

1:24:49

can also use the things canary to make canary

1:24:51

tokens. These are little trip wires. You

1:24:54

can drop into hundreds of places, every

1:24:56

corner of your network. They

1:24:59

are documents. They're word docs or

1:25:01

spreadsheets. They look like, I should say, word

1:25:04

docs or spreadsheets or PDFs or any

1:25:06

variety of files. And you can

1:25:08

name them something juicy like employee

1:25:12

social security numbers. Probably wouldn't do that.

1:25:14

Don't make it too obvious. You know, just, you know,

1:25:16

payroll information. That's a good one. .xls. It's

1:25:20

not, of course. What it is, is it's

1:25:22

a little trip wire. When the bad guy tries to open

1:25:25

it, you get a notification. And

1:25:27

this is what the things canary does. No

1:25:29

false positives. Just

1:25:32

real information when it matters the most.

1:25:35

Trivial, this is the things canary philosophy.

1:25:38

Things is the company. Canary is the device.

1:25:40

They're trivial to deploy with a ridiculously

1:25:43

high quality of signal. Things

1:25:46

canary's founding team has a background in

1:25:48

offense. I'll

1:25:51

let you imagine what that means. But

1:25:53

they have, you know, as is often the case, the

1:25:55

people who are good at breaking into systems and they've

1:25:58

trained governments and companies and all kinds of things. of

1:26:00

people in how to do this

1:26:02

are also very good at defense, right?

1:26:05

So they prioritize defensive thinking in developing

1:26:07

these hardware devices. Canary's

1:26:09

team is uber-conscious of your trust

1:26:12

in their product. They take extensive

1:26:14

measures to ensure the devices do not add

1:26:17

to the risk. They are merely

1:26:19

in a way of knowing if you're

1:26:21

under attack. The designed to be

1:26:23

secure, they use, I mean, actually, we rarely

1:26:26

talk about this, but they're using memory-safe

1:26:28

languages. The firmware

1:26:30

is hard-coded to be robust,

1:26:33

reliable. It's sandboxed. No

1:26:36

critical network secrets are ever stored

1:26:38

on the Canary. So even if somebody

1:26:40

somehow figured out how to penetrate it, there's

1:26:42

nothing in there for them to use. And

1:26:45

to maintain security, Canary's cannot

1:26:48

be dual-homed. You

1:26:50

might want to, but this is part of the security.

1:26:53

They don't want to bridge into another network. They can't have

1:26:55

dual VLANs or span

1:26:57

VLANs because that could give attackers

1:27:00

ability to jump across networks. I

1:27:02

only mention this so that you understand. These

1:27:04

are really well-designed devices that do

1:27:07

one thing and do one thing perfectly. Think

1:27:09

Canary has put immense effort into ensuring they don't

1:27:12

introduce new vulnerabilities to a customer network.

1:27:15

And frankly, all it has to do, if one of those

1:27:17

birds can let off just one warning

1:27:19

before it's owned, it's done

1:27:22

what it needs to do. It's earned its keep. Customers

1:27:25

have the option to break the back-end authentication

1:27:27

link so you can even prevent Think staff

1:27:30

from accessing their console. You

1:27:32

do get a console with your Think Canary,

1:27:35

but you also get there's API. It

1:27:37

uses web hooks. It will work with Slack. It

1:27:40

works with anything, email, of course, texts,

1:27:42

to give you just the alerts that matter. By

1:27:46

the way, a third-party assessment commends the

1:27:48

secure design of the platform and software stack

1:27:50

implemented by Think. Hardware canaries,

1:27:53

like the ones we have at the studio, VM-based

1:27:56

and cloud-based canaries, they're deployed and

1:27:58

loved on all sides.

1:27:59

seven

1:28:01

continents. That's a little

1:28:03

hint as to who might be using them. Go

1:28:05

to canary.tools.love

1:28:08

and you can see, surprisingly,

1:28:10

I wouldn't, you know, honestly, it'd be better if you

1:28:13

didn't mention you used them, but CISOs

1:28:15

and CIOs love their canaries so much, they

1:28:18

often have posted messages about

1:28:20

how great they are, and if you

1:28:22

wanna see a lot of those messages, canary.tools.love,

1:28:26

genuine customer love for the things

1:28:28

to canary. So,

1:28:30

in short, it's a little honeypot, you

1:28:32

can put on your network, you can create additional

1:28:34

canary tokens throughout your network, as

1:28:36

many as you want, you can run it in a cloud, you

1:28:39

can run it in VM, it

1:28:41

will let you know if there's an intruder with

1:28:43

a high signal, high

1:28:45

value signal, that really tells

1:28:48

you what you need to know and nothing more and no false

1:28:50

positives. If you don't hear from your canary,

1:28:52

that's good, and I don't hear from our canary. One

1:28:54

time we did, that was bad, and

1:28:57

we used it, it was great. If

1:29:00

you go to canary.tools.twit, just $7,500

1:29:05

a year will get you five of them, I wanna give you the pricing

1:29:07

so you know upfront. Many

1:29:10

big companies will have hundreds, small

1:29:13

company like ours might just have a half dozen, five, $7,500

1:29:16

a year, you get five canaries, your

1:29:19

own hosted console, you get upgrades,

1:29:21

you get support, you get maintenance, they're not big, they're like

1:29:23

an external hard drive, and they

1:29:25

have two connections, one to plug into the wall for the

1:29:27

power, and one for the ethernet,

1:29:30

and that's it, and they're on your network. If

1:29:34

you use the code twit in the how did you hear about us box,

1:29:37

you get 10% off the price of your canaries forever

1:29:41

for as long as you use them, make sure you

1:29:43

use TWIT in the how did you hear about

1:29:45

us box, and this is, if

1:29:47

you need any reassurance at all, this is a great thing

1:29:49

to know. If you are unhappy

1:29:51

for any reason, you can return your canaries,

1:29:54

you have a 60 day, two month money

1:29:57

back guarantee full refund.

1:29:59

tell you we've offered this for years

1:30:02

we've been talking about the canary they

1:30:04

have not they tell me they have not once

1:30:07

has that refund ever been asked for nobody

1:30:10

who gets a canary wants to get them you

1:30:12

know get their money back they think this is this is the

1:30:14

best thing ever you

1:30:16

will love your things canaries and if you don't full

1:30:18

refund for two months visit canary.tools

1:30:21

slash twit very important and please

1:30:23

use the offer code TWIT in the how did you hear

1:30:25

about us back for 10% off for life

1:30:28

we love these guys I think they've advertised

1:30:30

once or twice before in Windows Weekly but if

1:30:33

you're in charge of the security in your office

1:30:36

in your network at your company or

1:30:38

you know somebody who is tell them about the things

1:30:40

to canary thinks canary

1:30:43

all right canary.tools slash twit offer

1:30:45

code TWI all

1:30:48

right thank you for letting me interrupt I

1:30:51

mean it's

1:30:52

it's your show I don't it's

1:30:55

actually nice to have something to interrupt I mean

1:30:57

you're welcome but I'm just saying

1:31:01

that's one of the reasons I really tell people about Club

1:31:03

Twit we're doing so many great things you do that great hands-on

1:31:06

Windows for Club Twit because

1:31:09

even though we do have three ads in the show which which is

1:31:11

great that's the max we're

1:31:14

having a hard time selling ads there are there

1:31:16

the thing is the people who love it like Wix thinks

1:31:19

canary our advertisers

1:31:21

you know the next

1:31:24

break will be for a company called Miro they

1:31:26

get it they understand what we're doing but that's there

1:31:29

are a lot of agencies and advertisers who just think podcasts

1:31:31

don't work and they're going

1:31:33

to wait for a ball and everything it's horrible

1:31:35

it's terrible and that's why you know two

1:31:37

years ago Lisa said you know we need a club because we

1:31:39

want to have a way for listeners to support

1:31:42

us with or without advertising $7

1:31:43

a month if you're not a member twit.tv

1:31:46

slash club twit lots

1:31:47

of benefits including Paul's hands-on

1:31:50

Windows you do the same thing at the therot.com

1:31:52

you have the premium and

1:31:54

I always tell everybody get

1:31:56

get premium that's really yeah

1:31:58

it's the stuff you do there

1:31:59

to support the content makers.

1:32:02

Well you do, you know, you're smart. You kind of do,

1:32:05

it's similar to us, in fact I think we kind of took a page from your book,

1:32:07

a lot of free content. And we're

1:32:09

free content. But then you do

1:32:11

some really extra above and beyond stuff.

1:32:14

And it is worth, what is it, 40 bucks a

1:32:16

year? It's not expensive, it's really worth it. Well,

1:32:19

it's about, yeah, it depends. But yeah, 52 maybe. Yeah,

1:32:22

I mean not buy every year. Not on sale, but we have sales

1:32:24

and stuff. Like the Windows Everywhere stuff you do, it was

1:32:27

so great. I really enjoy the, it's

1:32:30

a little bit more thoughtful. It's not so news focused,

1:32:32

right? Yeah, none

1:32:34

of it is news focused. The premium stuff. Yeah,

1:32:37

I love that. Unless it's an analysis

1:32:40

of something that happened. You're a big thinker. So

1:32:42

it's nice to get a big thinker. I'm a small

1:32:44

man, but a big thinker. A big thinker. I'm

1:32:47

just a big man too, unfortunately. Anyway.

1:32:52

Yeah, god, I don't even know what happened there. Okay, so,

1:32:55

you know what, I'm just gonna say, if I were in Mexico

1:32:57

City, I'd be bigger than

1:32:59

you. That's, you know what, no, actually, honestly,

1:33:02

well, okay, you could eat poorly here, that's true.

1:33:05

We eat really well. I mean, we live on street tacos. What are you talking

1:33:07

about? Yeah, I don't eat tortillas

1:33:09

or anything like that. Yeah. Oh, you're smart.

1:33:12

That's smart.

1:33:13

That's my, well, I eat well here, and I mean that in a,

1:33:15

like, nutritional sense. Oh, that's so great. Yeah.

1:33:19

On we go. Yes, so there

1:33:21

were two Windows Insider builds that

1:33:23

landed just as we started the podcast. The

1:33:26

first was for the dev channel. Just

1:33:28

a couple of things, file explorer fixes. Again,

1:33:30

I keep saying this. We're gonna see those for a long time to come. The

1:33:32

new file explorer's terrible. And

1:33:35

then this is an interesting one I hadn't considered,

1:33:37

which is copilot support for multi-monitors.

1:33:39

So they're gonna let you move the copilot pane, which

1:33:42

actually they're calling a sidebar, by the way. Sidebar

1:33:44

two words, I hope they changed that, because the Windows

1:33:47

Vista sidebar was one word.

1:33:50

But they're gonna let you move it to a different monitor, and it

1:33:52

will remember where it was. So you can do that

1:33:54

kind of stuff. So not, you know, nothing huge, but that's

1:33:56

good. And then the Canary build,

1:33:58

which we sort of... maybe will one day

1:34:01

turn into Windows 12. Mail

1:34:03

and calendar are no longer installed when

1:34:05

you do a clean install the operating system. We know those are

1:34:07

going away. So that makes some sense. And

1:34:10

you know, when I'm updating the book, for example, I'm going to actually

1:34:12

delete my mail and calendar chapters and

1:34:14

replace those with an Outlook chapter. Everyone

1:34:17

can complain because no one likes Outlook.

1:34:19

They do what like that is. And

1:34:22

then Bluetooth, Bluetooth

1:34:25

LE support for hearing aids, which is kind of

1:34:27

fun.

1:34:28

And some updates. That's interesting. So

1:34:30

my hearing aids I can pair with my phone. And

1:34:32

there's really a lot of reasons for that. Yeah.

1:34:35

Yeah. My son has cochlear implants, but it's

1:34:37

a similar technology. And are

1:34:39

they do they have Bluetooth cochlear? Yeah. Well,

1:34:42

it's Bluetooth capabilities. So what you can do is connect

1:34:44

to devices, obviously, and hear directly into the device.

1:34:46

And when you go to concerts and things, you can connect to a system

1:34:49

in the arena. So awesome. Yeah. It's some

1:34:51

really neat things

1:34:53

happening with that stuff. So

1:34:55

that's great. This is one of those examples

1:34:57

of accessibility. People think

1:34:59

accessibility features are for people with handicaps

1:35:02

or whatever. And honestly,

1:35:04

a lot of these are for everybody. So we

1:35:06

all have we all been we're all going

1:35:08

to be hearing aids eventually, including

1:35:13

my wife, but don't tell her I said that.

1:35:18

As I say of my voice, the first to know so

1:35:20

I don't speak Spanish very well. But they always hear me clearly

1:35:22

when I tell them the percentage number of the tip no

1:35:24

one's ever gotten that one wrong. My

1:35:27

wife can hear me clearly if she wants to. So

1:35:29

anyway, a couple

1:35:31

weeks ago, we were talking about Windows seven and

1:35:33

eight keys and how they were no longer going to

1:35:35

work for activating Windows 11.

1:35:39

That has happened. So Microsoft has confirmed they've

1:35:41

actually cut it off. So we weren't sure at the time, you

1:35:44

know, would it be some future version of Windows or some,

1:35:46

you know, milestone, whatever note they just turned it off.

1:35:49

So now I wonder if I could use seven,

1:35:51

eight keys to three to 10 and then

1:35:53

upgrade to 11. Yep, I

1:35:55

wonder the same. Now

1:35:58

I'm going to think about that.

1:35:59

Because I'll find out. There's

1:36:02

no way to know no way in the world.

1:36:04

You can fully you could yeah, I'm

1:36:06

gonna find out That's a good idea I

1:36:09

had a guy who wrote me in a panic because he had

1:36:11

upgraded his I don't know if it was a hard drive

1:36:13

or some component in his PC he

1:36:15

had used a Windows 7 license

1:36:18

to install Windows 11 and

1:36:20

Then it unactivated and

1:36:22

he thought this was why this is nothing to do with it Once

1:36:24

you have acted activated Windows 11,

1:36:27

it is nothing to do with the product key It's

1:36:29

it's it's due to a matrix of your hardware features

1:36:31

of the PC. It's just that right. It's something

1:36:34

on the machine Yeah,

1:36:37

that was the historic problem with activation

1:36:39

So I just told you can just contact Microsoft

1:36:41

support you won't have any issues there And

1:36:43

this just happened. I haven't had a chance to watch about

1:36:46

five minutes of one of these videos But there

1:36:49

are now three new Dave Cutler interviews

1:36:51

on YouTube I have to tell you how rare it is for

1:36:53

there to be any Dave Cutler interviews anywhere 81.

1:36:55

Yes

1:36:59

81 I know so but so

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one of them is called what successful programmers do

1:37:03

that I was done who cares one one of them

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is priceless. I gotta find this thing. It's

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called Windows

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Longhorn was the worst code I've

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ever seen

1:37:15

So I cannot wait to watch

1:37:17

these Is a character

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he is a genius he is a

1:37:22

Pimital has been decades

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and yes, he is a killer decades. He

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still roams those halls I think

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I'd like exactly everyone around

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when he does yeah, he is Yeah,

1:37:34

the aged lion that's never been taken down

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by anybody and never will be he'll leave

1:37:39

of his own accord. He'll will fade in Yeah,

1:37:43

so that's

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just don't you gotta go look at that so gold

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gold. Oh, yeah. Oh, he's amazing

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amazing And then there's

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a beautiful little story The

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US Internal Revenue Service actually

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investigated Microsoft's taxes over

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a several year period from 2004 to 2013, so a 10 year period. And it's

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important to note

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those years, 2004 to 2013. Think

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about that for a second because I'm going to get back to it. And

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what they discovered was that they owe $29 billion

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in taxes, not including penalty

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business. What's the result? Well, this will

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take many years. Yeah, they'll

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probably end up paying a fine and

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not the full

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amount is my guess, but it's going to take many, many years.

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This, as we said last week, is

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the Dutch sandwich or the Irish? No,

1:38:35

the Irish... Irish reach around

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or what? I don't think that's the official

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term. They

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have a funny name for it. But it is fair

1:38:44

to say the Irish do offer tax breaks to

1:38:46

corporations. Yeah, and so Apple did

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this. I don't know what Microsoft did, but Apple did this. They set

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up headquarters in Ireland and made

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sure that all the revenues outside

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the US went through the Irish brand.

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This is exactly what Microsoft did.

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They did it in Puerto Rico, which is not another

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country, but it's tax free though. It's

1:39:04

a tax free. They funneled. What

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they did was they had a business in Puerto

1:39:08

Rico that would... And again, the year is 2014 to 2013

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important for two reasons. This is one of them. They

1:39:14

were making... I just wanted to announce, Twitter

1:39:17

is moving to Puerto Rico. Yes.

1:39:20

Right. That. Right.

1:39:22

I'd love to be in Puerto Rico. We moved my address there and

1:39:24

I'll live here and I'll... Same thing. I'll pay

1:39:26

no taxes and I'll live in a place... That's the problem. That's

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the problem is that they really weren't doing business in

1:39:31

Puerto Rico. Right. Well, no, they were. So

1:39:33

they had a little subsidiary, a little...

1:39:36

I don't

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know if it's an independent company, whatever it was, that

1:39:38

was manufacturing DVDs.

1:39:40

That was what they did. So what Microsoft

1:39:43

did was assign all of the licensing

1:39:45

rights for Windows to them and then put

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all the money through that. So

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this is exactly what Apple was doing in Ireland.

1:39:52

The DVD is Windows. Yeah.

1:39:54

So... Alright. So why is this state

1:39:57

range also interesting? I mentioned before

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that... Microsoft very suspiciously

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made Windows 7 license sales and

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even 20 million a month

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for the entire duration of Windows 7, which

1:40:12

you'll remember

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went on sale in 2009, right at

1:40:17

the tail end of this. These years

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were a period of time where Amy Hood was

1:40:22

not the CFO of Microsoft. It was someone named Peter

1:40:24

Klein. I'm not saying Peter Klein

1:40:26

is to blame per se, but I

1:40:29

am saying that it is coincidental that

1:40:31

he was around for a lot of these little financial shenanigans

1:40:34

and that there are things you can get away with and things you can't

1:40:36

and that I think Amy Hood, we might credit her

1:40:39

current era with the lack of

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transparency during the quarterly earnings reports,

1:40:43

right, with hard numbers, all things I complain about every quarter.

1:40:46

But if you look back at Peter Klein, I think we're going to remember

1:40:48

him for this stuff because he was

1:40:50

clearly played with the 7. You think you know Excel?

1:40:53

This guy was playing with money. We've

1:40:55

got to come up with a name for the Puerto

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Rican tax run around. Okay.

1:41:00

Is it possible to make this non-offensive? Yeah,

1:41:02

no, they're famous. Puerto

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Rican sandwich is a wonderful smash campaign sandwich.

1:41:06

It's called the hiberito. So

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they did the Puerto Rican hiberito. The

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hiberito. It's a new way of doing taxes.

1:41:17

Or the tripletas, another delicious.

1:41:21

You know what? It's a sandwich king and he teaches

1:41:23

me all life. I like that. What's

1:41:27

the mofongo I would have called it? The

1:41:29

mofongo. The mofongo. What

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are you, I mofongoed

1:41:34

our tax and said I get bad news. It's the

1:41:36

Italian Puerto Rican version. No,

1:41:39

I think you're talking about the mofo, mofoleta, right?

1:41:41

No, mofongo. It's a... Mofongo?

1:41:44

What's a mofongo? It's a plantain based mashed potato

1:41:46

we think with meat inside of it. Oh yeah,

1:41:48

my daughter's weighing in. So you've had a mofongo,

1:41:51

Abby? It could be fantastic. She

1:41:53

loves it. She loves the mofongo. She

1:41:56

lived in Mexico for quite a while.

1:41:58

This is what I'm talking about Puerto Rico. I don't know. Oh,

1:42:01

have you lived in Puerto Rico? No, we visited, but

1:42:03

that was my... I love Puerto Rico. The food item

1:42:05

I love. Yeah, I did too. No, but actually, if it wasn't

1:42:07

for the hurricane that wipes out of the island every three

1:42:09

years on schedule, I'd probably

1:42:12

be living... It's hard to do podcast network with

1:42:14

inconsistent electricity. It's hard

1:42:16

to do anything if you don't have electricity. I mean,

1:42:18

you know,

1:42:20

that's the problem. I love it there, but in

1:42:22

US dollar, I mean, what could be... It's

1:42:24

an easy flight. Incidentally, it's not just Microsoft

1:42:26

that used it as a tax haven. It's

1:42:28

the big... All the big American

1:42:31

multinationals use the

1:42:33

double Irish. The double Irish. There it

1:42:35

is. That's it. So that's the

1:42:38

Irish. I like that we... They start in Ireland and

1:42:40

they route it through... Yeah, yeah, yeah. Of

1:42:42

course. I gotta talk to my accountant,

1:42:47

Vinny Bumbay, and he's gonna do this. Sorry.

1:42:50

He was the... Yeah, this is the accounting that

1:42:52

Thomas Crown used. Leo,

1:42:54

it's easy. It's no problem. Right.

1:42:57

Who's gonna be fine? Everybody's gonna be fine.

1:42:59

The guy in the suit that doesn't fit is on TV one night.

1:43:01

You're like, we're in trouble. And then you get the

1:43:03

bill for $29 billion. This

1:43:07

will take several years. We're

1:43:10

not gonna find out the answer to this next year. You can

1:43:12

pay for a lot of legal fees with $29 million.

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