3 Things we bet you didn't know about Microsoft
Gaming, Windows and shitty devices
1. Microsoft Gaming: from Minecraft to Call of Duty
Did you know that Microsoft Gaming has a huge intellectual property portfolio, ranging from Minecraft to Candy Crush Saga to Call of Duty? Microsoft has done several acquisitions over the years, significantly boosting the number of games they own:
Activision Blizzard
Acquired in 2023 for $69 billion
Activision’s gaming portfolio ranges from games like the Call of Duty series (including Black Ops, modern warfare, etc.), World of Warcraft to Candy Crush Saga.
💡: There has been sold over 500 million copies of Call of Duty games in total! That means that, if every copy has been sold to a new player, 1/16 people on this planet bought a Call of Duty game!
Mojang Studios
Acquired in 2014 for $2.5 billion
Mojang studios is the proud game producer and owner of Minecraft. More than 350 million copies of Minecraft have been sold, including to all four analysts at The Dutch Investors, and the game still has about 100 million monthly active users.
💡: The Minecraft movie has grossed $910 million worldwide against a budget of $150 million, becoming the second-highest-grossing film of 2025 and the second-highest-grossing video game film of all time. Plans for 'A Minecraft Movie 2' seem to be already underway.
2. Windows is a cash-cow, but has had its growth phase
In our analysis, we concluded that Windows is past its growth phase. Since its launch of Windows 95, Microsoft has had a very dominant position in the computer/laptop operating space. Today, Windows has over 70% (!) market share in the Computer Operating Systems Market.
On every computer sold, Microsoft earns money through Windows by charging PC manufacturers a licensing fee. Companies like Dell, HP, and Lenovo pay Microsoft to pre-install Windows on their devices. This licensing model makes Windows a very high-margin business: once the software is built, each additional copy costs almost nothing to distribute.
Their biggest competitor? OS X (Apple) with about 15% market share. Except Windows and OS X, there is no other player that can get a foot on the ground in this market.
💡: Although Windows has seen stable growth in the past, it’s heavily dependent on pc/laptop sales cycles. Given that every person today has a computer on his desk, the growth phase lies in the past. The huge opportunity here is doing price increases, something they’ve seldomly done in the past.
3. Microsoft is sh*t in building devices
Why? Let’s see:
Surface laptops
Although their Microsoft Surface laptop is a solid product, they have a hard time competing with Apple’s MacBooks due to their ecosystem and premium brand name. On the other side, there are cheaper laptop/pc manufacturers like HP, Dell, Lenovo, ASUS and Acer. There just isn’t really a place/opportunity in the market for Microsoft. They’re too late, and their product isn’t differentiated enough.
Xbox
The Xbox is one of Microsoft’s most successful hardware ventures. First launched in 2001 under CEO Steve Ballmer, the console carved out a lasting place in the gaming industry. While Xbox consoles continue to sell well today, sales have declined in recent years.
Xbox has some fierce competition of Sony’s PlayStation and Nintendo consoles. Especially PlayStation has a similar device, and have been taking market share of Xbox steadily. Network effects are a disadvantage of Xbox: as more and more players use PlayStation, friends and gamers are likely to use the same device, so connecting in-game is possible. On the developer side, the more players use a console, the more attractive the market is to develop games for that console.
Xbox is still relevant and a well-settled player today, but to be honest, we don’t think the future is that bright for Xbox. Nintendo is cheaper and has a somewhat different, more niche, target audience than PlayStation and Xbox. Talking about PlayStation, they’ve over 50% market share in the console market. Given the characteristics of the market (network effect), we expect this to increase even further.
Mobile phones
Mobile phones represent one of Microsoft’s biggest failures. The first Windows Phone launched in late 2010, and in 2014, Microsoft acquired Nokia’s handset business for $7.2 billion. But by then, the company was already far behind Apple and Android. Eventually, the entire $7.2 billion investment was written off. Microsoft halted development of new Windows Phones in 2017, and official support ended in 2019.
💡: The Windows Phone has become a scar on Microsoft’s history, faded but never forgotten, marking a costly lesson in chasing a revolution that had already passed.
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Have a wonderful day and happy investing.
The Dutch Investors.