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  • In October 2017 publisher Electronic Arts unceremoniously shut down its studio Visceral Games best known for shooter series Dead Space Visceral was part of a dwindling breed at EA devoted to linear high budget games instead of a profitable live service model One former employee noted that even the popular Dead Space 2 had been considered a financial failure and the odds of a new one appearing in the near future seemed small Yet tomorrow EA will do just that releasing a remake of the original 2008 Dead Space developed by its Canadian team Motive Studio The Dead Space remake isn t the path I d have chosen for a resurrection of one of my favorite series It also happens to be great Dead Space 2023 is most obviously a better looking version of Dead Space 2008 Debuting on next generation consoles and PC it s the kind of game where everything glistens from the slimy explosive tentacles wreathing its futuristic spaceship to the ornate brassy ridges on protagonist Isaac Clarke s suit But beneath that surface Motive has polished the foundations of Dead Space with changes drawn from its 2011 sequel as well as some simple yet effective new ideas Rather than an elaborate reimagining in the vein of the Resident Evil 2 remake a metanarrative experiment like the Final Fantasy VII Remake or a user friendly transformation of a tough to play classic like the yet unreleased System Shock remake it s just an immensely solid update to an already excellent game and one that couldn t have come at a better time The Dead Space franchise is a third person shooter series defined by a clever twist you re in a disaster zone overrun by grotesque zombie like monstrosities dubbed necromorphs but instead of a bullet to the head the creatures go down when you sever their blade or bomb like limbs While horror games have explored just about every permutation of the hideously twisted human form Dead Space forces you to confront it with combat that feels like gruesome surgery aided by weapons based on power tools like plasma cutters and radial arm saws as well as telekinetic powers and a time slowing ability called stasis The Dead Space remake like the original sets this action on a mining spaceship called the USG Ishimura which has gone unexpectedly silent after cracking open a planet in the depths of space Engineer Isaac Clarke boards the Ishimura hoping to repair it and track down his girlfriend a doctor named Nicole Brennan Instead he and his team find themselves thwarted at every turn not only by the necromorph outbreak but also by a mysterious sabotage operation and their own increasingly unstable mental states Isaac learns the outbreak stems from an apparently madness inducing alien artifact brought on board the Ishimura And a powerful religious cult called the Church of Unitology which is of course absolutely nothing like the Church of Scientology may be helping it spread Dead Space was initially conceived as a sequel to the exploration heavy immersive sim System Shock 2 and although that plan was abandoned early in development the influence feels evident in the original and carries over to the remake The Ishimura is a fairly small and self contained location full of looping shortcuts and a tram backbone that lets you move easily between levels It s unsurprisingly reminiscent of Arkane s 2017 Prey another indirect System Shock successor Both iterations of the game involve fixing problems by backtracking through flickering corridors and cavernous common areas blasting the monsters that burst out of vents or play dead in plain sight It s a structure that Dead Space s two direct sequels would downplay moving toward comparatively linear level design But while the original Dead Space established the basic combat system some of the series best elements came later Dead Space 2 turned telekinesis into a full fledged secondary combat option letting you do things like freeze an enemy with stasis chop its arm off with a plasma cutter and pin it to a wall with its own severed limb It s so intuitive that the original game feels incomplete without it and the same goes for some other features like free floating zero gravity sections that let you jet through the vacuum of space rather than just hopping between walls with magnetic boots The Dead Space remake is the best that playing a Dead Space game has ever felt I ran through it on a PC with a controller and an Nvidia GeForce RTX 2070 graphics card the game s recommended spec On top of combining the first and second game s best elements Motive has overhauled a few undeniably bad encounters particularly a couple of interminable cannon blasting set pieces that now feel far snappier and less repetitive It maintains the methodical but not artificially slow pace of the original creating suspense with shameless sudden blackouts and enemy jump scares but mostly avoiding the heavily scripted sensory assaults and quicktime sequences that Dead Space 2 became known for Isaac will certainly take his share of physical and mental punishment but Dead Space is emphatically a horror game something to play with and master not simply be subjected to And the remake introduces a few welcome tweaks of its own The game largely keeps Dead Space s original array of weapons but it buffs some of the less popular ones with fresh alternate fire modes the flamethrower for instance can now produce a protective wall of fire As you attack enemies you ll see chunks of their flesh visibly erode letting you know how close you are to severing a limb One weapon takes things further with a fire mode that strips off entire layers of skin and muscle leaving brittle animate skeletons that you can knock out with another weapon It s gory and over the top and I can t get enough of it Dead Space still happily embraces the shooter genre s artificial yet satisfying shorthands Enemies have familiar glowing weak spots to aim for and you ll stomp gigantic supply crates to release the futuristic equivalent of a single 100 bill carefully collecting money for supplemental ammo and dopamine drip upgrades like new suits On top of being glossy and dramatically lit compared to their 2008 counterparts the levels are now full of clearly marked stuff to smash and throw at enemies I have never been so aware of furniture s potential impalement value Some doors and lockers are gated behind a new clearance system that lets you open them later when you ve collected credentials off the bodies of dead crew officers giving you an organic way to learn about the people on the Ishimura The upgrades encourage exploration too Like before you collect power nodes that you can weld to your weapons and suit at benches scattered through the levels But this time some of those welding points are unlocked by items that enable specific special functions like setting enemies on fire with plasma shots While the powers aren t necessarily new the items add an extra incentive to poke around the ship And they re far simpler than the confusing modular weapons in Dead Space 3 an okay at best game whose influence is nearly undetectable in the remake The riskiest moves Motive makes aren t mechanical but narrative Dead Space began as a relatively simple space horror story that evoked Event Horizon but its plot became more lore heavy and tortured with each game and supplemental tie in book Dead Space 3 s climax is as baroquely incoherent as a fever dream culminating in the decision to spoilers make players physically fight a moon And between the first two games Isaac underwent a dramatic shift from a silent masked protagonist to a character voiced by actor Gunner Wright who plays the man as a combination of weary snarky and horrifically traumatized Wright came on board for the Dead Space remake giving Isaac a voice in conversations that have been extended centering characters motivations and backstories more clearly You re no longer playing a silent figure constantly ordered around by snippy superiors doing the bare minimum to convey where you re supposed to go but instead a competent technician who has a tense but collegial relationship with his team A series of side missions which are basically just encouragements to explore specific optional rooms also give a little extra background on his relationship with Nicole and what she s been doing on the ship But I always found Isaac s inexpressiveness in Dead Space distracting because it was so ostentatiously stiff in a story about ordinary people having a brush with madness and tragedy A first person control system lets the protagonist simply disappear but a third person avatar makes it impossible to ignore all of the moments that someone would normally react and doesn t A lot of these reactions were buried in the original game s menu text which is written from Isaac s perspective Wright imbues the character with an endearing charm that makes him fun not only to protect but also to be around for 15 or 16 hours It s enough to make me forget that Motive has made Isaac a generic brunet in his rare unmasked scenes rather than keeping his distinctive salt and pepper hair Isaac s companions including Nicole have been rewritten to feel more engaging and human We re thankfully past the period where blockbuster shooters have to pretend to be nuanced high art but the remake is simply better at pragmatic genre storytelling the underappreciated craft of giving characters enough personality and relatable motivation that I want to listen to them talk The remake is weakest toward the end where it feels either rushed or hemmed in by the original script But it still pulls a little twist that s compellingly creepy even if it doesn t change the story s ultimate trajectory The Dead Space remake feels clean and good in a way that few big budget Western titles do right now In 2008 Dead Space seemed like a variation on any number of story based horror shooters It was directly inspired by Resident Evil 4 which itself is getting a remake this year but also shared DNA with first person games like BioShock and Half Life 2 which beat it by a few years to telekinesis and weaponized industrial tools But in 2023 s world of modest indie narrative games and sprawling open world AAA slogs it stands nearly alone The closest equivalent Dead Space creator Glen Schofield s The Callisto Protocol seemed almost embarrassed to be a game instead of an unforgiving interactive movie Sadly I m not sure what Motive s success here means I ve seen the game compared to a director s cut but none of Dead Space s original primary creators are involved and the term suggests a level of deference toward designers that EA simply hasn t shown Dead Space remains a relic from an age of self contained prestige shooters that almost certainly isn t coming back I m not even sure Motive s approach would work for remaking the series other games But none of that diminishes the sheer ridiculous pleasure of ripping up a zombie with a sawblade and stomping it for loot Credit https www theverge com 23567481 dead space remake ea motive ps5 xbox pc review
    The Dead Space remake is a grisly cut of classic horror
    In October 2017 publisher Electronic Arts unceremoniously shut down its studio Visceral Games best known for shooter series Dead Space Visceral was part of a dwindling breed at EA devoted to linear high budget games instead of a profitable live service model One former employee noted that even the popular Dead Space 2 had been considered a financial failure and the odds of a new one appearing in the near future seemed small Yet tomorrow EA will do just that releasing a remake of the original 2008 Dead Space developed by its Canadian team Motive Studio The Dead Space remake isn t the path I d have chosen for a resurrection of one of my favorite series It also happens to be great Dead Space 2023 is most obviously a better looking version of Dead Space 2008 Debuting on next generation consoles and PC it s the kind of game where everything glistens from the slimy explosive tentacles wreathing its futuristic spaceship to the ornate brassy ridges on protagonist Isaac Clarke s suit But beneath that surface Motive has polished the foundations of Dead Space with changes drawn from its 2011 sequel as well as some simple yet effective new ideas Rather than an elaborate reimagining in the vein of the Resident Evil 2 remake a metanarrative experiment like the Final Fantasy VII Remake or a user friendly transformation of a tough to play classic like the yet unreleased System Shock remake it s just an immensely solid update to an already excellent game and one that couldn t have come at a better time The Dead Space franchise is a third person shooter series defined by a clever twist you re in a disaster zone overrun by grotesque zombie like monstrosities dubbed necromorphs but instead of a bullet to the head the creatures go down when you sever their blade or bomb like limbs While horror games have explored just about every permutation of the hideously twisted human form Dead Space forces you to confront it with combat that feels like gruesome surgery aided by weapons based on power tools like plasma cutters and radial arm saws as well as telekinetic powers and a time slowing ability called stasis The Dead Space remake like the original sets this action on a mining spaceship called the USG Ishimura which has gone unexpectedly silent after cracking open a planet in the depths of space Engineer Isaac Clarke boards the Ishimura hoping to repair it and track down his girlfriend a doctor named Nicole Brennan Instead he and his team find themselves thwarted at every turn not only by the necromorph outbreak but also by a mysterious sabotage operation and their own increasingly unstable mental states Isaac learns the outbreak stems from an apparently madness inducing alien artifact brought on board the Ishimura And a powerful religious cult called the Church of Unitology which is of course absolutely nothing like the Church of Scientology may be helping it spread Dead Space was initially conceived as a sequel to the exploration heavy immersive sim System Shock 2 and although that plan was abandoned early in development the influence feels evident in the original and carries over to the remake The Ishimura is a fairly small and self contained location full of looping shortcuts and a tram backbone that lets you move easily between levels It s unsurprisingly reminiscent of Arkane s 2017 Prey another indirect System Shock successor Both iterations of the game involve fixing problems by backtracking through flickering corridors and cavernous common areas blasting the monsters that burst out of vents or play dead in plain sight It s a structure that Dead Space s two direct sequels would downplay moving toward comparatively linear level design But while the original Dead Space established the basic combat system some of the series best elements came later Dead Space 2 turned telekinesis into a full fledged secondary combat option letting you do things like freeze an enemy with stasis chop its arm off with a plasma cutter and pin it to a wall with its own severed limb It s so intuitive that the original game feels incomplete without it and the same goes for some other features like free floating zero gravity sections that let you jet through the vacuum of space rather than just hopping between walls with magnetic boots The Dead Space remake is the best that playing a Dead Space game has ever felt I ran through it on a PC with a controller and an Nvidia GeForce RTX 2070 graphics card the game s recommended spec On top of combining the first and second game s best elements Motive has overhauled a few undeniably bad encounters particularly a couple of interminable cannon blasting set pieces that now feel far snappier and less repetitive It maintains the methodical but not artificially slow pace of the original creating suspense with shameless sudden blackouts and enemy jump scares but mostly avoiding the heavily scripted sensory assaults and quicktime sequences that Dead Space 2 became known for Isaac will certainly take his share of physical and mental punishment but Dead Space is emphatically a horror game something to play with and master not simply be subjected to And the remake introduces a few welcome tweaks of its own The game largely keeps Dead Space s original array of weapons but it buffs some of the less popular ones with fresh alternate fire modes the flamethrower for instance can now produce a protective wall of fire As you attack enemies you ll see chunks of their flesh visibly erode letting you know how close you are to severing a limb One weapon takes things further with a fire mode that strips off entire layers of skin and muscle leaving brittle animate skeletons that you can knock out with another weapon It s gory and over the top and I can t get enough of it Dead Space still happily embraces the shooter genre s artificial yet satisfying shorthands Enemies have familiar glowing weak spots to aim for and you ll stomp gigantic supply crates to release the futuristic equivalent of a single 100 bill carefully collecting money for supplemental ammo and dopamine drip upgrades like new suits On top of being glossy and dramatically lit compared to their 2008 counterparts the levels are now full of clearly marked stuff to smash and throw at enemies I have never been so aware of furniture s potential impalement value Some doors and lockers are gated behind a new clearance system that lets you open them later when you ve collected credentials off the bodies of dead crew officers giving you an organic way to learn about the people on the Ishimura The upgrades encourage exploration too Like before you collect power nodes that you can weld to your weapons and suit at benches scattered through the levels But this time some of those welding points are unlocked by items that enable specific special functions like setting enemies on fire with plasma shots While the powers aren t necessarily new the items add an extra incentive to poke around the ship And they re far simpler than the confusing modular weapons in Dead Space 3 an okay at best game whose influence is nearly undetectable in the remake The riskiest moves Motive makes aren t mechanical but narrative Dead Space began as a relatively simple space horror story that evoked Event Horizon but its plot became more lore heavy and tortured with each game and supplemental tie in book Dead Space 3 s climax is as baroquely incoherent as a fever dream culminating in the decision to spoilers make players physically fight a moon And between the first two games Isaac underwent a dramatic shift from a silent masked protagonist to a character voiced by actor Gunner Wright who plays the man as a combination of weary snarky and horrifically traumatized Wright came on board for the Dead Space remake giving Isaac a voice in conversations that have been extended centering characters motivations and backstories more clearly You re no longer playing a silent figure constantly ordered around by snippy superiors doing the bare minimum to convey where you re supposed to go but instead a competent technician who has a tense but collegial relationship with his team A series of side missions which are basically just encouragements to explore specific optional rooms also give a little extra background on his relationship with Nicole and what she s been doing on the ship But I always found Isaac s inexpressiveness in Dead Space distracting because it was so ostentatiously stiff in a story about ordinary people having a brush with madness and tragedy A first person control system lets the protagonist simply disappear but a third person avatar makes it impossible to ignore all of the moments that someone would normally react and doesn t A lot of these reactions were buried in the original game s menu text which is written from Isaac s perspective Wright imbues the character with an endearing charm that makes him fun not only to protect but also to be around for 15 or 16 hours It s enough to make me forget that Motive has made Isaac a generic brunet in his rare unmasked scenes rather than keeping his distinctive salt and pepper hair Isaac s companions including Nicole have been rewritten to feel more engaging and human We re thankfully past the period where blockbuster shooters have to pretend to be nuanced high art but the remake is simply better at pragmatic genre storytelling the underappreciated craft of giving characters enough personality and relatable motivation that I want to listen to them talk The remake is weakest toward the end where it feels either rushed or hemmed in by the original script But it still pulls a little twist that s compellingly creepy even if it doesn t change the story s ultimate trajectory The Dead Space remake feels clean and good in a way that few big budget Western titles do right now In 2008 Dead Space seemed like a variation on any number of story based horror shooters It was directly inspired by Resident Evil 4 which itself is getting a remake this year but also shared DNA with first person games like BioShock and Half Life 2 which beat it by a few years to telekinesis and weaponized industrial tools But in 2023 s world of modest indie narrative games and sprawling open world AAA slogs it stands nearly alone The closest equivalent Dead Space creator Glen Schofield s The Callisto Protocol seemed almost embarrassed to be a game instead of an unforgiving interactive movie Sadly I m not sure what Motive s success here means I ve seen the game compared to a director s cut but none of Dead Space s original primary creators are involved and the term suggests a level of deference toward designers that EA simply hasn t shown Dead Space remains a relic from an age of self contained prestige shooters that almost certainly isn t coming back I m not even sure Motive s approach would work for remaking the series other games But none of that diminishes the sheer ridiculous pleasure of ripping up a zombie with a sawblade and stomping it for loot Credit https www theverge com 23567481 dead space remake ea motive ps5 xbox pc review
    The Dead Space remake is a grisly cut of classic horror
    General news4 days ago

    The Dead Space remake is a grisly cut of classic horror

    In October 2017, publisher Electronic Arts unceremoniously shut down its studio Visceral Games, best known for shooter series Dead Space. Visceral was part of a dwindling breed at EA, devoted to linear high-budget games instead of a profitable “live service” model. One former employee noted that even the popular Dead Space 2 had been considered a financial failure, and the odds of a new one appearing in the near future seemed small. Yet tomorrow, EA will do just that, releasing a remake of the original 2008 Dead Space developed by its Canadian team Motive Studio. The Dead Space remake isn’t the path I’d have chosen for a resurrection of one of my favorite series. It also happens to be great.

    Dead Space (2023) is most obviously a better-looking version of Dead Space (2008). Debuting on next-generation consoles and PC, it’s the kind of game where everything glistens, from the slimy explosive tentacles wreathing its futuristic spaceship to the ornate brassy ridges on protagonist Isaac Clarke’s suit. But beneath that surface, Motive has polished the foundations of Dead Space with changes drawn from its 2011 sequel as well as some simple yet effective new ideas. Rather than an elaborate reimagining in the vein of the Resident Evil 2 remake, a metanarrative experiment like the Final Fantasy VII Remake, or a user-friendly transformation of a tough-to-play classic like the yet-unreleased System Shock remake, it’s just an immensely solid update to an already excellent game — and one that couldn’t have come at a better time.

    The Dead Space franchise is a third-person shooter series defined by a clever twist: you’re in a disaster zone overrun by grotesque zombie-like monstrosities dubbed “necromorphs,” but instead of a bullet to the head, the creatures go down when you sever their blade- or bomb-like limbs. While horror games have explored just about every permutation of the hideously twisted human form, Dead Space forces you to confront it with combat that feels like gruesome surgery — aided by weapons based on power tools like plasma cutters and radial arm saws as well as telekinetic powers and a time-slowing ability called stasis.

    The Dead Space remake — like the original — sets this action on a mining spaceship called the USG Ishimura, which has gone unexpectedly silent after cracking open a planet in the depths of space. Engineer Isaac Clarke boards the Ishimura hoping to repair it and track down his girlfriend, a doctor named Nicole Brennan. Instead, he and his team find themselves thwarted at every turn, not only by the necromorph outbreak but also by a mysterious sabotage operation and their own increasingly unstable mental states. Isaac learns the outbreak stems from an apparently madness-inducing alien artifact brought on board the Ishimura. And a powerful religious cult called the Church of Unitology, which is, of course, absolutely nothing like the Church of Scientology, may be helping it spread.

    Dead Space was initially conceived as a sequel to the exploration-heavy immersive sim System Shock 2, and although that plan was abandoned early in development, the influence feels evident in the original and carries over to the remake. The Ishimura is a fairly small and self-contained location, full of looping shortcuts and a tram backbone that lets you move easily between levels. (It’s unsurprisingly reminiscent of Arkane’s 2017 Prey, another indirect System Shock successor.) Both iterations of the game involve fixing problems by backtracking through flickering corridors and cavernous common areas, blasting the monsters that burst out of vents or play dead in plain sight. It’s a structure that Dead Space’s two direct sequels would downplay, moving toward comparatively linear level design.

    But while the original Dead Space established the basic combat system, some of the series’ best elements came later. Dead Space 2 turned telekinesis into a full-fledged secondary combat option — letting you do things like freeze an enemy with stasis, chop its arm off with a plasma cutter, and pin it to a wall with its own severed limb. It’s so intuitive that the original game feels incomplete without it, and the same goes for some other features, like free-floating zero-gravity sections that let you jet through the vacuum of space rather than just hopping between walls with magnetic boots.

    The Dead Space remake is the best that playing a Dead Space game has ever felt. (I ran through it on a PC with a controller and an Nvidia GeForce RTX 2070 graphics card, the game’s recommended spec.) On top of combining the first and second game’s best elements, Motive has overhauled a few undeniably bad encounters, particularly a couple of interminable cannon-blasting set pieces that now feel far snappier and less repetitive. It maintains the methodical but not artificially slow pace of the original, creating suspense with shameless sudden blackouts and enemy jump scares but mostly avoiding the heavily scripted sensory assaults and quicktime sequences that Dead Space 2 became known for. Isaac will certainly take his share of physical and mental punishment, but Dead Space is emphatically a horror game — something to play with and master, not simply be subjected to.

    And the remake introduces a few welcome tweaks of its own. The game largely keeps Dead Space’s original array of weapons, but it buffs some of the less popular ones with fresh alternate fire modes — the flamethrower, for instance, can now produce a protective wall of fire. As you attack enemies, you’ll see chunks of their flesh visibly erode, letting you know how close you are to severing a limb. One weapon takes things further with a fire mode that strips off entire layers of skin and muscle, leaving brittle animate skeletons that you can knock out with another weapon. It’s gory and over the top, and I can’t get enough of it.

    Dead Space still happily embraces the shooter genre’s artificial yet satisfying shorthands. Enemies have familiar glowing weak spots to aim for, and you’ll stomp gigantic supply crates to release the futuristic equivalent of a single $100 bill, carefully collecting money for supplemental ammo and dopamine-drip upgrades like new suits. On top of being glossy and dramatically lit compared to their 2008 counterparts, the levels are now full of clearly marked stuff to smash and throw at enemies; I have never been so aware of furniture’s potential impalement value. Some doors and lockers are gated behind a new “clearance” system that lets you open them later, when you’ve collected credentials off the bodies of dead crew officers, giving you an organic way to learn about the people on the Ishimura.

    The upgrades encourage exploration, too. Like before, you collect power nodes that you can weld to your weapons and suit at benches scattered through the levels. But this time, some of those welding points are unlocked by items that enable specific special functions, like setting enemies on fire with plasma shots. While the powers aren’t necessarily new, the items add an extra incentive to poke around the ship. And they’re far simpler than the confusing modular weapons in Dead Space 3, an okay-at-best game whose influence is nearly undetectable in the remake.

    The riskiest moves Motive makes aren’t mechanical but narrative. Dead Space began as a relatively simple space-horror story that evoked Event Horizon, but its plot became more lore heavy and tortured with each game and supplemental tie-in book — Dead Space 3’s climax is as baroquely incoherent as a fever dream, culminating in the decision to (spoilers) make players physically fight a moon. And between the first two games, Isaac underwent a dramatic shift from a silent masked protagonist to a character voiced by actor Gunner Wright, who plays the man as a combination of weary, snarky, and horrifically traumatized.

    Wright came on board for the Dead Space remake, giving Isaac a voice in conversations that have been extended, centering characters’ motivations and backstories more clearly. You’re no longer playing a silent figure constantly ordered around by snippy superiors doing the bare minimum to convey where you’re supposed to go but, instead, a competent technician who has a tense but collegial relationship with his team. A series of side missions, which are basically just encouragements to explore specific optional rooms, also give a little extra background on his relationship with Nicole and what she’s been doing on the ship.

    But I always found Isaac’s inexpressiveness in Dead Space distracting because it was so ostentatiously stiff in a story about ordinary people having a brush with madness and tragedy. A first-person control system lets the protagonist simply disappear, but a third-person avatar makes it impossible to ignore all of the moments that someone would normally react and doesn’t. (A lot of these reactions were buried in the original game’s menu text, which is written from Isaac’s perspective.) Wright imbues the character with an endearing charm that makes him fun not only to protect but also to be around for 15 or 16 hours. It’s enough to make me forget that Motive has made Isaac a generic brunet in his rare unmasked scenes, rather than keeping his distinctive salt-and-pepper hair.

    Isaac’s companions, including Nicole, have been rewritten to feel more engaging and human. We’re thankfully past the period where blockbuster shooters have to pretend to be nuanced high art, but the remake is simply better at pragmatic genre storytelling: the underappreciated craft of giving characters enough personality and relatable motivation that I want to listen to them talk. The remake is weakest toward the end, where it feels either rushed or hemmed in by the original script. But it still pulls a little twist that’s compellingly creepy, even if it doesn’t change the story’s ultimate trajectory.

    The Dead Space remake feels clean and good in a way that few big-budget Western titles do right now. In 2008, Dead Space seemed like a variation on any number of story-based horror shooters. It was directly inspired by Resident Evil 4 (which itself is getting a remake this year) but also shared DNA with first-person games like BioShock and Half-Life 2, which beat it by a few years to telekinesis and weaponized industrial tools. But in 2023’s world of modest indie narrative games and sprawling open-world AAA slogs, it stands nearly alone. The closest equivalent, Dead Space creator Glen Schofield’s The Callisto Protocol, seemed almost embarrassed to be a game instead of an unforgiving interactive movie.

    Sadly, I’m not sure what Motive’s success here means. I’ve seen the game compared to a director’s cut, but none of Dead Space’s original primary creators are involved, and the term suggests a level of deference toward designers that EA simply hasn’t shown. Dead Space remains a relic from an age of self-contained prestige shooters that almost certainly isn’t coming back; I’m not even sure Motive’s approach would work for remaking the series’ other games. But none of that diminishes the sheer ridiculous pleasure of ripping up a zombie with a sawblade and stomping it for loot.

    Credit: https://www.theverge.com/23567481/dead-space-remake-ea-motive-ps5-xbox-pc-review

  • Image source The Motley Fool Greetings and welcome to the Microsoft fiscal year 2023 second quarter earnings conference call At this time all participants are in a listen only mode A question and answer session will follow the formal presentation Operator instructions As a reminder this conference is being recorded I would now like to turn the conference over to your host Brett Iversen vice president investor relations Good afternoon and thank you for joining us today On the call with me are Satya Nadella chairman and chief executive officer Amy Hood chief financial officer Alice Jolla chief accounting officer and Keith Dolliver deputy general counsel On the Microsoft Investor Relations website you can find our earnings press release and financial summary slide deck which is intended to supplement our prepared remarks during today s call and provides the reconciliation of differences between GAAP and non GAAP financial measures On this call we will discuss certain non GAAP items The non GAAP financial measures provided should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with GAAP They are included as additional clarifying items to aid investors in further understanding the company s second quarter performance in addition to the impact these items and events have on the financial results All growth comparisons we make on the call today relate to the corresponding period of last year unless otherwise noted We will also provide growth rates in constant currency when available as a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations They just revealed what they believe are the ten best stocks for investors to buy right now and Microsoft wasn t one of them That s right they think these 10 stocks are even better buys Where growth rates are the same in constant currency we ll refer to the growth rate only We will post our prepared remarks to our website immediately following the call until the complete transcript is available Today s call is being webcast live and recorded If you ask a question it will be included in our live transmission in the transcript and in any future use of the recording You can replay the call and view the transcript on the Microsoft Investor Relations website During this call we ll be making forward looking statements which are predictions projections or other statements about future events These statements are based on current expectations and assumptions that are subject to risks and uncertainties Actual results could materially differ because of factors discussed in today s earnings press release in the comments made during this conference call and in the Risk Factors section of our Form 10 K Forms 10 Q and other reports and filings with the Securities and Exchange Commission We do not undertake any duty to update any forward looking statement And with that I ll turn the call over to Satya Thank you very much Brett I want to start with the context I shared with our employees last week on the changing environment and our priorities As I meet with customers and partners a few things are increasingly clear Just as we saw customers accelerate their digital spend during the pandemic we are now seeing them optimize that spend Also organizations are exercising caution given the macroeconomic uncertainty And the next major wave of computing is being born as we turn the world s most advanced AI models into a new computing platform In this environment we remain convicted on three things This is an important time for Microsoft to work with our customers helping them realize more value from their tech spend and building long term loyalty and share position while internally aligning our own cost structure with our revenue growth This in turn sets us up to participate in the secular trend where digital spend as a percentage of GDP is only going to increase And lastly we re going to lead in the AI era knowing that maximum enterprise value gets created during platform shifts With that as a backdrop the Microsoft Cloud exceeded 27 billion in quarterly revenue up 22 and 29 in constant currency Now I ll highlight examples of our innovation starting with Azure Moving to the cloud is the best way for any customer in today s economy to mitigate demand uncertainty and energy costs while gaining efficiencies of cloud native development Enterprises have moved millions of cases to Azure and run twice as many calls on our cloud today than they did two years ago And yet we re still in the early innings when it comes to long term cloud opportunity As an example insurer AIA was able to save more than 20 by migrating to Azure and reduced IT provisioning time from multiple months to just an hour We also continue to lead with hybrid computing with Azure Arc We now have more than 12 000 Arc customers double the number a year ago including companies like Citrix Northern Trust and PayPal Now on to data Customers continue to choose and implement the Microsoft Intelligent Data Platform over the competition because of its comprehensiveness integration and lower cost Bayer for example used the data stack to evaluate results from clinical trials faster and more efficiently while meeting regulatory requirements and ASOS chose Cosmos DB to power real time product recommendations and order processing for over 26 million global customers Now on to AI The age of AI is upon us and Microsoft is powering it We are witnessing nonlinear improvements in capability of foundation models which we are making available as platforms And as customers select their cloud providers and invest in new workloads we are well positioned to capture that opportunity as a leader in AI We have the most powerful AI supercomputing infrastructure in the cloud It s being used by customers and partners like OpenAI to train state of the art models and services including ChatGPT Just last week we made our Azure OpenAI service broadly available and already over 200 customers from KPMG to Al Jazeera are using it We will soon add support for ChatGPT enabling customers to use it in their own applications for the first time And yesterday we announced the completion of the next phase of our agreement with OpenAI We are pleased to be their exclusive cloud provider and we ll deploy their models across our consumer and enterprise products as we continue to push the state of the art in AI All of this innovation is driving growth across our Azure AI services Azure ML revenue alone has increased more than 100 for five quarters in a row with companies like AXA FedEx and H amp R Block choosing the service to deploy manage and govern their models Now on to developers Modernizing applications is mission critical to any company s operations today And with GitHub Visual Studio and Azure Pass services we have the most comprehensive portfolio of tools to help GitHub is now home to 100 million developers and GitHub Copilot is the first at scale AI product built for this era fundamentally transforming developer productivity More than 1 million people have used Copilot to date This quarter we brought Copilot to businesses and we have seen strong interest and early adoption from companies including Duolingo Lemonade and Volkswagen CARIAD Software Group Now on to Power Platform Power Platform is becoming an essential digital transformation tool as every business looks to streamline their operations and drive productivity in today s environment We are helping customers realize superior time to value with our end to end suite spanning low code no code tools automation virtual agents and business intelligence We are leading in robotic process automation Power Automate has more than 45 000 customers from AT amp T to Rabobank up over 50 year over year And we are making it easier for anyone to streamline repetitive tasks introducing new AI powered features to turn natural language prompts into complex workflows Now on to business applications Dynamics 365 is taking share as we help businesses digitize their service finance customer experience and supply chain functions For example J amp J Pepsi Cola Bottlers is moving from reactive to predictive field service Fuji Films is optimizing its operations Investec is closing deals faster with conversational intelligence Baylor Scott amp White in Texas is using our digital contact center to enhance patient communications And this quarter we introduced our new supply chain platform helping customers like iFit and Kraft Heinz apply AI to predict and mitigate disruptions Now on to Industry Solutions Our industry and cross industry clouds are driving pull through for our entire tech stack Our cloud for retail was front and center at NRF last week as we introduced new tools to help retailers manage their day to day operations and digitize their physical stores Polish retailer Zabka has built the largest chain of autonomous stores in Europe with the help of our technology In Financial Services our new partnership with London Stock Exchange Group will deliver next generation of data analytics and workspace solutions And in healthcare we are rapidly becoming the partner of choice for any provider looking to generate real value from AI With Nuance DAX ambient intelligence solution physicians can reduce documentation time by half improving the quality of their patient interactions Now on to systems of work Microsoft 365 Teams and Viva are essential for every organization to adapt to the new world of work Microsoft 365 is rapidly evolving into an AI first platform that enables every individual to amplify their creativity and productivity with both our established applications as well as new applications like Designer Stream and Loop We have more than 63 million consumer subscribers up 12 year over year and we introduced Microsoft 365 Basic bringing our premium offerings to more people Teams surpassed 280 million monthly active users this quarter showing durable momentum since the pandemic and we continue to take share across every category from collaboration to chat to meetings to calling Teams has emerged as a first class platform Apps from Adobe Atlassian Poly ServiceNow and Workday have each surpassed 0 5 million active users and the number of third party apps with more than 10 000 users increased nearly 40 year over year There are more than 500 000 active Teams Rooms devices up 70 year over year and the number of customers with more than 1 000 rooms doubled year over year Novo Nordisk will deploy Teams Rooms to 5 000 meeting rooms globally in our largest deal to date Teams Phone continues to take share and is the market leader in cloud calling We have added more than 5 million PSTN seats over the last 12 months alone With Teams Premium we are meeting enterprise demand for advanced features like end to end encryption and AI powered recaps We have seen strong interest in preview and we will make it broadly available next month With Microsoft Viva we have created a new market category for employee experience and organizational productivity U S Bank is using Viva to streamline employee communications and Carlsberg turned to Viva to centralize its digital employee experience for 29 000 employees In today s environment aligning the entire organization and the most important work is critical Viva Goals brings objectives and key results directly into the flow of daily work Viva has also become an indispensable tool for business process Viva Sales is the super app in Microsoft 365 for sellers We have seen strong interest since making it generally available this quarter All up we continue to see organizations consolidate on Microsoft 365 80 of our enterprise customers use five or more Microsoft 365 applications And organizations across the private and public sector including EY IKEA NTT Communications Rio Tinto as well as the state government of Virginia are increasingly choosing our premium E5 offerings for advanced security compliance voice and analytics Now on to Windows While the number of PCs shipped declined during the quarter returning to pre pandemic levels usage intensity of Windows continues to be higher than pre pandemic with time spent per PC up nearly 10 Monthly active devices also reached an all time high this quarter And for commercial customers Windows 11 adoption continues to grow because of its differentiated security and productivity value proposition We re also seeing growth in cloud delivered Windows with usage of Windows 365 and Azure Virtual Desktop up by over two thirds year over year Leaders in every industry from Campari and Grant Thornton U K to Nutrien and Woolworths are using cloud delivered Windows including more than 60 of the Fortune 500 Now on to security Over the past 12 months our security business surpassed 20 billion in revenue as we help customers protect their digital estate across clouds and endpoint platforms We re the only company with integrated end to end tools spanning identity security compliance device management and privacy informed and trained on over 65 trillion signals each day We are taking share across all major categories we serve Customers are consolidating on our security stack in order to reduce risk complexity and cost The number of organizations with four or more workloads increased over 40 year over year U K retailer Fraser Group for example consolidated from 10 security vendors to just Microsoft Roku moved identity and access management to the cloud with Azure Active Directory And Estella Pharma Ferrovial and University of Toronto all switched to Microsoft Sentinel because of our integrated XDR and SIM capabilities Now on to LinkedIn People and companies continue to look to LinkedIn to connect learn sell and get hired We once again saw record engagement among our more than 900 million members Three members are signing up every second Over 80 of these members are from outside the United States And as the members come to the platform to find and share professional knowledge and expertise newsletter creation was up 10x year over year Skills are the new currency and people are increasingly investing in their skill building to keep up with their changing roles in industries We offer more than 20 000 courses in 11 languages and companies are also turning to a skills based approach in place of degree or pedigree to identify qualified talent with more than 45 of the hires on LinkedIn explicitly using skills data to fill their roles Finally LinkedIn Marketing Solutions continues to be a leader in B2B digital advertising helping companies deliver the right message to the right audience on a safe and trusted platform Now on to advertising Despite headwinds in the ad market we continue to innovate across our first and third party portfolios Our browser Microsoft Edge gained share for the seventh consecutive quarter Bing continues to gain share in the United States and daily users of our Start personalized content feed increased over 30 year over year We are now empowering retailers and expanding our third party inventory With PromoteIQ we are building a complete omnichannel media platform for companies like the Australian retailer Endeavor as well as Canada s Hudson s Bay and Global the largest Brazilian TV broadcasters chose Xandr to launch a new media buying platform in that market Now on to gaming In gaming we continue to pursue our ambition to give players more choice to play great games wherever whenever and however they want We saw new highs for Game Pass subscriptions game streaming hours and monthly active devices and monthly active users surpassed a record 120 million during the quarter We continue to invest to add value to Game Pass This quarter we partnered with Riot Games to make the company s PC and mobile games along with premium content available to subscribers And finally we are energized by our upcoming lineup of AAA game launches including exciting new titles from ZeniMax and Xbox Game Studios and we ll be sharing details in gameplay at our showcase tomorrow In closing I want to extend my deepest gratitude to our employees for their continued dedication to our mission customers and partners We will continue to pursue our long term opportunity and innovation agenda with urgency while also raising the bar on our operational excellence With that I ll hand it over to Amy Thank you Satya and good afternoon everyone I d like to start by reiterating Satya s thoughts on the changing environment and our priorities which underpin the decisions communicated in last week s announcement The resulting Q2 charge negatively impacted gross margin by 152 million operating income by 1 2 billion and earnings per share by 0 12 Our second quarter revenue was 52 7 billion up 2 and 7 in constant currency When adjusted for the charge gross margin dollars increased 2 and 8 in constant currency operating income decreased 3 and increased 6 in constant currency and earnings per share was 2 32 which decreased 6 and increased 2 in constant currency In our consumer business the PC market was in line with our expectations but execution challenges impacted our Surface business Advertising spend declined slightly more than expected which impacted search and news advertising and LinkedIn Marketing Solutions In our commercial business we delivered strong growth in line with our expectations However as you heard from Satya we are seeing customers exercise caution in this environment and we saw results weaken through December We saw moderated consumption growth in Azure and lower than expected growth in new business across the stand alone Office 365 EMS and Windows commercial products that are sold outside the Microsoft 365 suite From a geographic perspective we saw strong execution in many regions around the world However performance in the U S was weaker than expected Importantly we continued to see share gains in areas such as data and AI Dynamics Teams Security and Edge Commercial bookings increased 7 and 4 in constant currency lower than expected Consistent execution across our renewal sales motions including strong recapture rates and growth in Azure commitments on a high prior year comparable were partially offset by the slowdown in growth of new stand alone business noted earlier Commercial remaining performance obligation increased 29 to 26 in constant currency to 189 billion Roughly 45 will be recognized in revenue in the next 12 months up 24 year over year The remaining portion which will be recognized beyond the next 12 months increased 32 Our annuity mix increased two points year over year to 96 FX decreased total company revenue by five points in line with expectations At a segment level FX decreased Productivity and Business Processes revenue growth by six points one point favorable to expectations FX impact on Intelligent Cloud and More Personal Computing were both in line with expectations Additionally FX decreased both COGS and operating expense growth by two points one point unfavorable to expectations Microsoft Cloud revenue was 27 1 billion and grew 22 and 29 in constant currency ahead of expectations Microsoft Cloud gross margin percentage increased roughly two points year over year to 72 a point better than expected driven by lower energy costs Excluding the impact of the change in accounting estimate for useful lives Microsoft Cloud gross margin percentage decreased roughly one point primarily driven by sales mix shift to Azure Company gross margin percentage was 67 Excluding the impact of the change in accounting estimate gross margin percentage decreased roughly two points driven by a lower mix of Windows OEM revenue and sales mix shift from licensing to cloud Operating expense when adjusted for the Q2 charge increased 11 and 13 in constant currency about 500 million lower than expected Operating expense growth was driven by investments in cloud engineering the Nuance acquisition and LinkedIn At a total company level headcount ended December 19 higher than a year ago Sequential headcount growth was less than 1 Year over year growth included roughly six points from the Nuance and Xandr acquisitions which closed last Q3 and Q4 respectively Adjusted for the charge operating margins decreased roughly two points year over year to 41 Excluding the impact of the change in accounting estimate operating margins declined roughly four points primarily driven by unfavorable FX impact as well as a lower mix of OEM revenue Now to our segment results Revenue from Productivity and Business Processes was 17 billion and grew 7 and 13 in constant currency in line with expectations when excluding the favorable FX impact noted earlier Office Commercial revenue grew 7 and 14 in constant currency Office 365 Commercial revenue increased 11 and 18 in constant currency slightly better than expected with healthy renewal execution and ARPU growth as E5 momentum remains strong Paid Office 365 Commercial seats grew 12 year over year with installed base expansion across all workloads and customer segments Seat growth was driven by our small and medium business and frontline worker offerings although we saw some impact from the slowdown in growth of new business noted earlier Office Consumer revenue declined 2 and increased 3 in constant currency with continued momentum in Microsoft 365 subscriptions which grew 12 to 63 2 million partially offset by declines in our transactional business LinkedIn revenue increased 10 and 14 in constant currency driven by growth in Talent Solutions partially offset by weakness in Marketing Solutions from the advertising trends noted earlier Dynamics revenue grew 13 and 20 in constant currency driven by Dynamics 365 which grew 21 and 29 in constant currency Segment gross margin dollars increased 8 and 16 in constant currency and gross margin percentage increased roughly one point year over year Excluding the impact of the change in accounting estimate gross margin percentage decreased slightly driven by sales mix shift to cloud offerings Operating expense increased 12 and 14 in constant currency including roughly five points from the Q2 charge Operating income increased 6 and 17 in constant currency as the three points of favorable impact due to the change in accounting estimate were offset by three points of unfavorable impact from the Q2 charge noted earlier Next the Intelligent Cloud segment Revenue was 21 5 billion increasing 18 and 24 in constant currency in line with expectations Overall server products and cloud services revenue increased 20 and 26 in constant currency Azure and other cloud services revenue grew 31 and 38 in constant currency As noted earlier growth continued to moderate particularly in December and we exited the quarter with Azure constant currency growth in the mid 30s In our per user business the Enterprise Mobility and Security installed base grew 16 to over 241 million seats with impact from the slowdown in growth of new business noted earlier In our on premises server business revenue decreased 2 and increased 2 in constant currency with continued hybrid demand offset by weakness in transactional licensing Enterprise Services revenue grew 2 and 7 in constant currency Segment gross margin dollars increased 17 and 23 in constant currency and gross margin percentage decreased slightly Excluding the impact of the change in accounting estimate gross margin percentage declined roughly three points driven by sales mix shift to Azure and higher energy costs Operating expenses increased 34 and 37 in constant currency including roughly 13 points of impact from the Q2 charge noted earlier and roughly seven points of impact from the Nuance acquisition Operating income grew 7 and 15 in constant currency as roughly seven points of favorable impact of the change in accounting estimate was offset by approximately seven points of unfavorable impact from the Q2 charge Now to More Personal Computing Revenue was 14 2 billion decreasing 19 and 16 in constant currency below expectations driven by Surface Windows Commercial and search Windows OEM revenue decreased 39 year over year in line with expectations Excluding the impact from the Windows 11 deferral last year revenue declined 36 on a strong prior year comparable Devices revenue decreased 39 to 34 in constant currency below expectations due to execution challenges on new product launches Windows Commercial products and cloud services revenue declined 3 and increased 3 in constant currency lower than expected primarily due to the slowdown in growth of new business and stand alone offerings noted earlier Search and news advertising revenue ex TAC increased 10 and 15 in constant currency a bit lower than expected as noted earlier Our Edge browser gained more share than expected this quarter The Xandr acquisition contributed roughly six points of benefit And in gaming revenue declined 13 and 9 in constant currency in line with expectations Xbox hardware revenue declined 13 and 9 in constant currency Xbox content and services revenue declined 12 and 8 in constant currency given the strong first party content last year Segment gross margin dollars declined 29 and 24 in constant currency and gross margin percentage decreased roughly seven points year over year driven by lower device gross margin and sales mix shift to lower margin businesses Operating expenses increased 6 and 9 in constant currency including roughly six points of impact from the Q2 charge noted earlier and three points of impact from the Xandr acquisition Operating income decreased 47 and 40 in constant currency including roughly six points of unfavorable impact from the Q2 charge noted earlier Now back to total company results Capital expenditures including finance leases were 6 8 billion to support cloud demand Cash paid for PP amp E was 6 3 billion Cash flow from operations was 11 2 billion down 23 year over year as strong cloud billings and collections were more than offset by a tax payment related to the TCJA capitalization of R amp D provision as well as higher employee and supplier payments Free cash flow was 4 9 billion down 43 year over year Excluding the impact of this tax payment cash flow from operations declined 7 and free cash flow declined 16 This quarter other income and expense was negative 60 million lower than anticipated driven by a mark to market loss on a forward share purchase agreement Our effective tax rate was approximately 19 And finally we returned 9 7 billion to shareholders through share repurchases and dividends Now moving to our Q3 outlook which unless specifically noted otherwise is on a U S dollar basis My commentary for both the full year and next quarter does not include any impact from Activision which we continue to work toward closing in fiscal year 2023 subject to obtaining required regulatory approvals First FX Based on current rates we now expect FX to decrease total revenue growth by approximately three points COGS growth by one point and operating expense growth by two points Within the segments we anticipate roughly four points of negative impact on revenue growth in Productivity and Business Processes three points in Intelligent Cloud and two points in More Personal Computing In our Consumer business Windows OEM and devices will see continued declines as the PC market returns to pre pandemic levels And LinkedIn and search will be impacted as ad market spending remains a bit cautious In our Commercial business we expect business trends that we saw at the end of December to continue into Q3 While customers are more cautious in their spend we also have the opportunity to improve our execution given our strong position in global growth markets In commercial bookings with a declining expiry base and the strong prior year comparable in terms of large Azure contracts we expect growth to be relatively flat over year We expect consistent execution across our core and sales motions and continued commitments to our platform will be offset by impact from the slowdown of new business noted earlier and three points of unfavorable impact from the inclusion of Nuance in the prior year Microsoft Cloud gross margin percentage should be up roughly one point year over year driven by the accounting estimate change noted earlier Excluding that impact Q3 cloud gross margin percentage will decrease roughly one point driven by Azure In capital expenditures we expect a sequential increase on a dollar basis with normal quarterly spend variability in the timing of our cloud infrastructure build out Our data center investments continue to be based on a near term and longer term customer demand including AI opportunities Next segment guidance In Productivity and Business Processes we expect revenue to grow between 11 and 13 in constant currency or 16 9 billion to 17 2 billion In Office Commercial revenue growth will again be driven by Office 365 with seat growth across customer segments and ARPU growth through E5 We expect Office 365 revenue growth to be sequentially lower by roughly one point on a constant currency basis In our on premises business we expect revenue to decline in the mid 20s In Office Consumer we expect revenue growth in the low single digits driven by Microsoft 365 subscriptions For LinkedIn we expect mid single digit revenue growth with continued strong engagement on the platform although impacted by the advertising trends noted earlier and the slowdown in hiring particularly in the technology industry where we have significant exposure And in Dynamics we expect revenue growth to be in the low to mid teens driven by continued growth in Dynamics 365 which is now over 80 of total Dynamics revenue For Intelligent Cloud we expect revenue to grow between 17 and 19 in constant currency or 21 7 billion to 22 billion Revenue will continue to be driven by Azure which as a reminder can have quarterly variability primarily from our per user business and from in period revenue recognition depending on the mix of contracts In Azure our per user business should continue to benefit from Microsoft 365 suite momentum though we expect continued moderation in growth rate given the size of the installed base As I noted earlier we exited Q2 with Azure growth in the mid 30s in constant currency And from that we expect Q3 growth to decelerate roughly four to five points in constant currency FX impact in Azure is about one point more than at the segment level In our on premises server business we expect revenue to decline low single digits as demand for our hybrid solutions will be more than offset by unfavorable FX impact And in Enterprise Services revenue should decline low to mid single digits driven by Microsoft Consulting Services In More Personal Computing we expect revenue of 11 9 billion to 12 3 billion Windows OEM revenue should decline in the mid to high 30s in line with the PC market We expect Q3 PC units to be similar to pre pandemic levels In devices revenues should decline in the mid 40s as we work through the execution challenges noted earlier In Windows Commercial products and cloud services on a strong prior year comparable revenue should be relatively flat as customer demand for Microsoft 365 and our advanced security solutions will be partially offset by the slowdown in new business noted earlier Search and news advertising ex TAC should grow high single digits roughly seven points faster than overall search and news advertising revenue driven by continued volume strength supported by Edge browser share gains and the inclusion of Xandr And in gaming on a prior year comparable that benefited from increased console supply we expect revenue to decline in the high single digits We expect Xbox content and services revenue to decline in the low single digits as growth in Xbox Game Pass subscriptions will be more than offset by lower monetization per hour and third party and first party content Now back to company guidance We expect COGS to grow between 1 and 2 in constant currency or to be between 15 65 billion and 15 85 billion and operating expense to grow between 11 and 12 at constant currency or be 14 7 billion to 14 8 billion Other income and expense should be roughly 200 million as interest income is expected to more than offset interest expense As a reminder we are required to recognize mark to market gains and losses on our equity portfolio which can increase quarterly volatility We expect our Q3 effective tax rate to be between 19 and 20 And finally as a reminder for Q3 cash flow we expect to make a 1 2 billion cash tax payment related to the TCJA capitalization of R amp D provision Now some thoughts on H2 and the full year First in our Commercial business revenue grew 20 on a constant currency basis in H1 However we now expect to see a deceleration in H2 given how we exited December Next higher energy costs for the full year are now expected to be 500 million compared to our previous estimate of 800 million Third as we continue to prioritize our investments and anniversary the Nuance and Xandr acquisitions our Q4 operating expense growth should be in the low single digits in constant currency Finally we remain committed to operational excellence aligning cost and growth investing in our customer success and leading the AI platform wave As a result when excluding the Q2 charge and favorable impact from the change in accounting estimate we expect full year operating margins to be down roughly one point in constant currency and roughly two points in USD even with the headwinds from materially lower OEM revenue and higher energy costs In the first half of the year over 70 of our revenue came from our Commercial business and over 70 of that from Microsoft Cloud We have a resilient foundation and durable growth markets where we are gaining share I m confident in the ability of our Microsoft team to manage the near term by continuing to position ourselves for the future With that let s go to Q amp A Brett Thanks Amy We ll now move over to the Q amp A Out of respect for others on the call we request that participants please only ask one question Joe can you please repeat your instructions Ladies and gentlemen at this time we will be conducting a question and answer session Operator instructions Our first question comes from the line of Keith Weiss with Morgan Stanley Please proceed Excellent Thank you guys for taking the question I was hoping we could delve into the expansion of the investment into OpenAI Satya I was hoping you could talk to us about is there any expansion in the scope of what you guys are doing with OpenAI and the commitment that you guys are making in terms of sort of the compute capacity you re going to be giving to them And then maybe as from an investor s perspective how should we think about when this functionality is going to become expand beyond just sort of the Azure OpenAI services And where are we going to start to see some of the positive impacts to perhaps Bing or the productivity suite or more broadly across the solution portfolio Thank you so much Keith for the question So as you know we started the OpenAI partnership now in three years three and a half years ago And we ve been actually working very hard on a lot of elements of this partnership over the last three years And so I think the way for our investors to see this is we fundamentally believe that the next big platform wave as I said is going to be AI and be strong We also believe a lot of the enterprise value gets created by just being able to catch these waves and then have those waves impact every part of our tech stack and also create new solutions and new opportunities So whenever we think about platform opportunities and platform shift opportunities that s how we come at it How can we essentially ride the wave for everything that we have today and make it more expansive and then what can be created So if you take that lens the core of Azure or what is considered cloud computing fundamentally changes in its nature and how compute storage and network come together That s in some sense under the radar if you will for the last three and a half four years we ve been working very very hard to build both the training supercomputers and now of course the inference infrastructure because once you use AI inside of your applications it goes from just being training heavy to inference So I think core Azure itself is being transformed for the core infrastructure business It s being transformed And so you can see us with data beyond Azure OpenAI services even think about what Synapse plus OpenAI APIs can do We already have Power Platform incorporated capability You could prompt a I mean one of the reasons why we are the leaders in robotic process automation and workflow automation today is because of some of the AI capabilities that we have in there GitHub Copilot is in fact you would say the most at scale LLM based product out there in the marketplace today And so we fully expect us to sort of incorporate AI in every layer of the stack whether it s in productivity whether it s in our consumer services And so we re excited about it But I think that we re also excited about OpenAI innovation right So they commercialize their products We re excited about the ChatGPT being built on Azure and having the traction it has So we look to both there s an investment part to it and there s a commercial partnership But fundamentally it s going to be something that s going to drive I think innovation and competitive differentiation in every one of the Microsoft solutions by leading in AI Outstanding Thank you guys Thanks Joe next question please Our next question comes from the line of Brent Thill with Jefferies Please proceed Thanks Satya can you give us your overall macro view There were some comments you had made that concerned I think many about the state of the U S spending environment I m just curious if you could comment and follow up on what you re seeing there just from a spend environment throughout the year I think many came away with that seeming that you were saying it s getting worse not better Can you just give us a little more color on that Thank you Thank you Brent and first of all I was making a comment which is sort of a global comment not just a specific U S comment I mean there is only I always sort of subscribe to that there s only one law of gravity that I think all of us are subject to which is inflation adjusted economic growth in the world And then how many times that do we grow Because as I said in my I fundamentally believe tech as a percentage of GDP is going to be much higher and on a secular basis So the question is how many times is it given the overall inflation adjusted economic growth So that s kind of how I look at it Given that I think the two things that we see we commented on that even in the last quarter and it s even in the outlook which is the thing that customers are doing is what they accelerated during the pandemic They are making sure that they re getting most value out of it or optimizing it And then also being a bit more cautious on given the macroeconomic headwinds out there in the market So given those two things the point is at some point the optimizations will end In fact the money that they save in any optimization of any workload is what they into workloads And those workloads will start ramping up And so one of the key things we are watching for Brent is to make sure that we are gaining share in this space through our value propositions and even build loyalty with our customers so that long term we are well positioned for share gains So that s sort of fundamentally how we view it And then the other aspect I d also say is simultaneously investing in this new AI trend because I don t think any application start that happens next is going to look like the application starts of 2019 or 2020 They re all going to have considerations around how is my AI inference performance cost model is going to look like And that s where we are well positioned again So that s how I view it The market you all are better readers of quite frankly what s happening out there We can tell you what we see What we see is optimization and some cautious approach to new workloads and that will cycle through but we do fundamentally believe on a long term basis as a percentage of GDP tech spend is going to go up Thanks Brent Joe next question please Our next question comes from the line of Mark Moerdler with Bernstein Please proceed Thank you very much I d like to follow up a little bit on this question relating to optimization I know we saw some slowing this quarter You re guiding to some slowing next quarter in Cloud and Azure How much of that is do you believe at this point is truly people optimizing what they ve already bought and stepping that before that versus how much of that is due to macro factors themselves specifically impacting demand I d say two things and then Amy please feel free to add One is it absolutely is starts with workloads that they have at scale just because of the visibility one has on what s driving essentially the consumption meters And there s real guidance that we ourselves in the product to say here are the things that you do optimize your billing And so that s sort of what is the fundamental thing When we say do more with less and how can we help that s sort of the first place customers go to And then the next piece really I think is going to be about how they take the optimization that they get and the savings they get workload and what new project starts And that s where I think there s a reprioritization When should we start the new projects Those are the two things that are happening simultaneously They don t perfectly match but one of the things is they re looking to back some savings on some workloads and then start So that s where I think a little bit of what has to happen is the cycle time where the optimization cycle finishes the projects start and then the projects ramp And I think that that s what at least on the cloud consumption side you re seeing And on the per user side it s slightly different which is in per user also there was real acceleration when it comes to purchases of per user licenses whether it is for knowledge workers or frontline workers And again they re all now making sure that they re all getting used and the usage is going up Like when we look at our Office 365 usage all those numbers are pretty up year over year in a substantial way Like I gave you some of the Teams numbers In fact one of the things was what will have Teams usage after the pandemic Guess what They re up And so those are the good news And now once we cycle through that again the seats will get added and premium like I m very very excited about Teams Pro coming out in a couple of weeks And those are all the things that people will be able to sort of use to ensure that the ARPUs are also going up a bit value And Mark because I do think it s actually quite hard to separate from a driver perspective how much is optimization versus macro It s all related when you start to say what s the best ROI I can get on every budget dollar I spend and our job as a partner to so many of these customers is to help them do that So Satya has talked a bit about Azure Let me talk a little bit about the per user where the way it showed itself is we had very high renewal rates and very good suite performance at renewal meaning what we tend to call internally recapture While we had some more challenges on maybe a stand alone sale of a new product where the cycle is going to be a little longer right and you re going to have to show that cost savings But the suite sale the value in that showed itself in terms of strong E5 You can see the ARPU growth and you can see the consistency potentially in both renewal rate and in frankly the Microsoft 365 performance Perfect Thank you very much Yeah Thanks Mark Joe next question please Our next question comes from the line of Kash Rangan with Goldman Sachs Please proceed Thank you very much Satya I m curious if you could talk about how long the cycle time for optimization lasts Are we talking a couple of quarters few quarters or multiple years Because I do take your comment about tech spending as a percentage of global GDP going higher So if that were to happen this how do you frame the duration of this optimization that s happening in the industry Thank you so much I mean you know I think that you can you have a workload you optimize the workload and you start a new workload So the thing that I would say is when you re done with optimizing a workload is when you are done with the cycle So I think if you sort of say when did we enter this we accelerated workloads during the pandemic over a period of two years So we are optimizing I don t think we re going to take two years to optimize but we re going to take this year to optimize And then as we optimize the new projects start and the new project starts don t start instantly at their peak usage They start and then they scale And so those are the two cycles that will happen where there will be a time lag Got it So it s a temporary adjustment before we start to get the full effect of the next set of workloads Good to get that That s correct That s correct Thanks Kash Joe next question please The next question comes from the line of Karl Keirstead with UBS Please proceed Thank you This one for Amy Amy given the obviously tough environment it sounds like reaching that full fiscal year 20 constant currency Commercial revs guide would be tough Is that also true for the soft guidance for 10 plus total revenue growth for the year And if I could just sneak in a clarification Amy just because it s an important metric When you talk about a four to five point decel in Azure that s off of the 38 reported for December right not off the 35 exit rate Thank you It s all Karl let me just the first half of your question give me a second On the second half of your question which is the guide off the exit rate it s off the exit rate on Azure of four to five points just to make sure that is clear In terms of thinking about total year revenue right I did not comment on full year revenue as we continue I think really just to watch the Windows PC market as it returns to pre pandemic levels Outside of that as you can see the trends are relatively consistent So in some points it s important because if you look at the operating income margin guidance that I talked about the fact that we are guiding to really only one point of margin deceleration for the year on a constant currency basis with probably over 2 billion of headwind from the OEM business from what we had anticipated heading into the year the focus on margins the focus on prioritization the focus on putting our investments into where we know they have high return I actually feel quite good about the place that puts us in as we exit the year in terms of and the right energy right or leaving the year in Q4 on leverage Got it Super helpful Thanks Amy Thanks Karl Joe next question please Our next question comes from the line of Brad Zelnick with Deutsche Bank Please proceed Great Thanks very much Amy I wanted to ask about the expense actions that you announced last week Obviously not a decision that you would take lightly How are you thinking about headcount for the remainder of the year and the possibility for further expense actions if necessary And what criteria do you consider in making these decisions Thanks Brad listen thanks for that question Obviously as we think about the Q4 guidance around low single digit operating expense growth we start to as you know sort of lap certain real acceleration points that we had last year And we lapped the acquisitions both of Nuance and of Xandr So by the time that we get to the end of Q4 you ll see very moderated headcount growth on a year over year basis in addition to some the prioritization decisions we ve made And you re right We take decisions like the one we had to make to get our cost structure more in line with revenue just incredibly seriously because we have lots of very talented people who were impacted by that And so I do think that we feel confident in that exit rate As I said it will certainly imply that year over year growth as we lap some of the investments that we ve made will be quite small Thanks for the color Thanks Brad Joe next question please Our next question comes from the line of Brad Reback with Stifel Please proceed Great Thanks very much On Office 365 Commercial with you guys approaching 400 million seats and the E5 business really starting to accelerate here on that consolidated sort of expense ROI that you re putting forth should we think about the growth there more evenly balanced between seats and ARPU going forward or still to continue to favor seats Thanks Yes That s a good question especially because this quarter you started to see a little bit more of that ARPU influence And as you might have gathered from your question and I ll just reinforce it as we see some of this moderating seat growth whether that s some of the new SKU weakness that we had talked about some of the stand alone stuff you re starting to also see E5 ARPU happen at the same time So it does create some stability in that Office 365 Commercial revenue number So we re seeing still good seat growth still growth across all workloads And as you re pointing out we re getting further into the E5 health where we ve seen I want to say four or five really good quarters of E5 adoption The value there is just very high for customers in this environment between analytics security and I think we ve given some I think good security data points in terms of adoption and voice This is a place where customers can save money by moving to this suite And I do think you re starting to see some of that ARPU help And we re also investing in outside of Microsoft 365 in other per user workloads We were a new suite Power Platform on its own and even stand alone offers like even Teams Pro and what have you So there s a significant amount of work we want to do besides sort of the suites that we all sort of have at scale Great Thank you very much Joe we have time for one last question Our next question comes from the line of Tyler Radke with Citi Please proceed Yes Thanks for taking the question I wanted to ask just about how your visibility has changed in terms of some of the larger Azure customer ramps Could you just comment on to the extent those large customer ramps or if any of those projects are getting put on pause And then is there any way to just kind of quantify the AI potential contribution or maybe GPU powered contribution that Azure that you re expecting over the coming quarters Thank you On the second piece I think it s too early to sort of start somehow separating out AI from the rest of the workload I mean even the workloads themselves AI is just going to be a core part of a workload in Azure versus just AI alone So in other words if you have an application that s using a bunch of inference let s say it s also going to have a bunch of storage and it s going to have a bunch of other compute beyond GPU inferencing if you will So I think over time obviously I think every app is going to be an AI app Ladies and gentlemen please stand by That wraps up the Q amp A portion of today s earnings call Thank you for joining us today and we look forward to speaking with all of you soon This article is a transcript of this conference call produced for The Motley Fool While we strive for our Foolish Best there may be errors omissions or inaccuracies in this transcript As with all our articles The Motley Fool does not assume any responsibility for your use of this content and we 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    Microsoft (MSFT) Q2 2023 Earnings Call Transcript
    Image source The Motley Fool Greetings and welcome to the Microsoft fiscal year 2023 second quarter earnings conference call At this time all participants are in a listen only mode A question and answer session will follow the formal presentation Operator instructions As a reminder this conference is being recorded I would now like to turn the conference over to your host Brett Iversen vice president investor relations Good afternoon and thank you for joining us today On the call with me are Satya Nadella chairman and chief executive officer Amy Hood chief financial officer Alice Jolla chief accounting officer and Keith Dolliver deputy general counsel On the Microsoft Investor Relations website you can find our earnings press release and financial summary slide deck which is intended to supplement our prepared remarks during today s call and provides the reconciliation of differences between GAAP and non GAAP financial measures On this call we will discuss certain non GAAP items The non GAAP financial measures provided should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with GAAP They are included as additional clarifying items to aid investors in further understanding the company s second quarter performance in addition to the impact these items and events have on the financial results All growth comparisons we make on the call today relate to the corresponding period of last year unless otherwise noted We will also provide growth rates in constant currency when available as a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations They just revealed what they believe are the ten best stocks for investors to buy right now and Microsoft wasn t one of them That s right they think these 10 stocks are even better buys Where growth rates are the same in constant currency we ll refer to the growth rate only We will post our prepared remarks to our website immediately following the call until the complete transcript is available Today s call is being webcast live and recorded If you ask a question it will be included in our live transmission in the transcript and in any future use of the recording You can replay the call and view the transcript on the Microsoft Investor Relations website During this call we ll be making forward looking statements which are predictions projections or other statements about future events These statements are based on current expectations and assumptions that are subject to risks and uncertainties Actual results could materially differ because of factors discussed in today s earnings press release in the comments made during this conference call and in the Risk Factors section of our Form 10 K Forms 10 Q and other reports and filings with the Securities and Exchange Commission We do not undertake any duty to update any forward looking statement And with that I ll turn the call over to Satya Thank you very much Brett I want to start with the context I shared with our employees last week on the changing environment and our priorities As I meet with customers and partners a few things are increasingly clear Just as we saw customers accelerate their digital spend during the pandemic we are now seeing them optimize that spend Also organizations are exercising caution given the macroeconomic uncertainty And the next major wave of computing is being born as we turn the world s most advanced AI models into a new computing platform In this environment we remain convicted on three things This is an important time for Microsoft to work with our customers helping them realize more value from their tech spend and building long term loyalty and share position while internally aligning our own cost structure with our revenue growth This in turn sets us up to participate in the secular trend where digital spend as a percentage of GDP is only going to increase And lastly we re going to lead in the AI era knowing that maximum enterprise value gets created during platform shifts With that as a backdrop the Microsoft Cloud exceeded 27 billion in quarterly revenue up 22 and 29 in constant currency Now I ll highlight examples of our innovation starting with Azure Moving to the cloud is the best way for any customer in today s economy to mitigate demand uncertainty and energy costs while gaining efficiencies of cloud native development Enterprises have moved millions of cases to Azure and run twice as many calls on our cloud today than they did two years ago And yet we re still in the early innings when it comes to long term cloud opportunity As an example insurer AIA was able to save more than 20 by migrating to Azure and reduced IT provisioning time from multiple months to just an hour We also continue to lead with hybrid computing with Azure Arc We now have more than 12 000 Arc customers double the number a year ago including companies like Citrix Northern Trust and PayPal Now on to data Customers continue to choose and implement the Microsoft Intelligent Data Platform over the competition because of its comprehensiveness integration and lower cost Bayer for example used the data stack to evaluate results from clinical trials faster and more efficiently while meeting regulatory requirements and ASOS chose Cosmos DB to power real time product recommendations and order processing for over 26 million global customers Now on to AI The age of AI is upon us and Microsoft is powering it We are witnessing nonlinear improvements in capability of foundation models which we are making available as platforms And as customers select their cloud providers and invest in new workloads we are well positioned to capture that opportunity as a leader in AI We have the most powerful AI supercomputing infrastructure in the cloud It s being used by customers and partners like OpenAI to train state of the art models and services including ChatGPT Just last week we made our Azure OpenAI service broadly available and already over 200 customers from KPMG to Al Jazeera are using it We will soon add support for ChatGPT enabling customers to use it in their own applications for the first time And yesterday we announced the completion of the next phase of our agreement with OpenAI We are pleased to be their exclusive cloud provider and we ll deploy their models across our consumer and enterprise products as we continue to push the state of the art in AI All of this innovation is driving growth across our Azure AI services Azure ML revenue alone has increased more than 100 for five quarters in a row with companies like AXA FedEx and H amp R Block choosing the service to deploy manage and govern their models Now on to developers Modernizing applications is mission critical to any company s operations today And with GitHub Visual Studio and Azure Pass services we have the most comprehensive portfolio of tools to help GitHub is now home to 100 million developers and GitHub Copilot is the first at scale AI product built for this era fundamentally transforming developer productivity More than 1 million people have used Copilot to date This quarter we brought Copilot to businesses and we have seen strong interest and early adoption from companies including Duolingo Lemonade and Volkswagen CARIAD Software Group Now on to Power Platform Power Platform is becoming an essential digital transformation tool as every business looks to streamline their operations and drive productivity in today s environment We are helping customers realize superior time to value with our end to end suite spanning low code no code tools automation virtual agents and business intelligence We are leading in robotic process automation Power Automate has more than 45 000 customers from AT amp T to Rabobank up over 50 year over year And we are making it easier for anyone to streamline repetitive tasks introducing new AI powered features to turn natural language prompts into complex workflows Now on to business applications Dynamics 365 is taking share as we help businesses digitize their service finance customer experience and supply chain functions For example J amp J Pepsi Cola Bottlers is moving from reactive to predictive field service Fuji Films is optimizing its operations Investec is closing deals faster with conversational intelligence Baylor Scott amp White in Texas is using our digital contact center to enhance patient communications And this quarter we introduced our new supply chain platform helping customers like iFit and Kraft Heinz apply AI to predict and mitigate disruptions Now on to Industry Solutions Our industry and cross industry clouds are driving pull through for our entire tech stack Our cloud for retail was front and center at NRF last week as we introduced new tools to help retailers manage their day to day operations and digitize their physical stores Polish retailer Zabka has built the largest chain of autonomous stores in Europe with the help of our technology In Financial Services our new partnership with London Stock Exchange Group will deliver next generation of data analytics and workspace solutions And in healthcare we are rapidly becoming the partner of choice for any provider looking to generate real value from AI With Nuance DAX ambient intelligence solution physicians can reduce documentation time by half improving the quality of their patient interactions Now on to systems of work Microsoft 365 Teams and Viva are essential for every organization to adapt to the new world of work Microsoft 365 is rapidly evolving into an AI first platform that enables every individual to amplify their creativity and productivity with both our established applications as well as new applications like Designer Stream and Loop We have more than 63 million consumer subscribers up 12 year over year and we introduced Microsoft 365 Basic bringing our premium offerings to more people Teams surpassed 280 million monthly active users this quarter showing durable momentum since the pandemic and we continue to take share across every category from collaboration to chat to meetings to calling Teams has emerged as a first class platform Apps from Adobe Atlassian Poly ServiceNow and Workday have each surpassed 0 5 million active users and the number of third party apps with more than 10 000 users increased nearly 40 year over year There are more than 500 000 active Teams Rooms devices up 70 year over year and the number of customers with more than 1 000 rooms doubled year over year Novo Nordisk will deploy Teams Rooms to 5 000 meeting rooms globally in our largest deal to date Teams Phone continues to take share and is the market leader in cloud calling We have added more than 5 million PSTN seats over the last 12 months alone With Teams Premium we are meeting enterprise demand for advanced features like end to end encryption and AI powered recaps We have seen strong interest in preview and we will make it broadly available next month With Microsoft Viva we have created a new market category for employee experience and organizational productivity U S Bank is using Viva to streamline employee communications and Carlsberg turned to Viva to centralize its digital employee experience for 29 000 employees In today s environment aligning the entire organization and the most important work is critical Viva Goals brings objectives and key results directly into the flow of daily work Viva has also become an indispensable tool for business process Viva Sales is the super app in Microsoft 365 for sellers We have seen strong interest since making it generally available this quarter All up we continue to see organizations consolidate on Microsoft 365 80 of our enterprise customers use five or more Microsoft 365 applications And organizations across the private and public sector including EY IKEA NTT Communications Rio Tinto as well as the state government of Virginia are increasingly choosing our premium E5 offerings for advanced security compliance voice and analytics Now on to Windows While the number of PCs shipped declined during the quarter returning to pre pandemic levels usage intensity of Windows continues to be higher than pre pandemic with time spent per PC up nearly 10 Monthly active devices also reached an all time high this quarter And for commercial customers Windows 11 adoption continues to grow because of its differentiated security and productivity value proposition We re also seeing growth in cloud delivered Windows with usage of Windows 365 and Azure Virtual Desktop up by over two thirds year over year Leaders in every industry from Campari and Grant Thornton U K to Nutrien and Woolworths are using cloud delivered Windows including more than 60 of the Fortune 500 Now on to security Over the past 12 months our security business surpassed 20 billion in revenue as we help customers protect their digital estate across clouds and endpoint platforms We re the only company with integrated end to end tools spanning identity security compliance device management and privacy informed and trained on over 65 trillion signals each day We are taking share across all major categories we serve Customers are consolidating on our security stack in order to reduce risk complexity and cost The number of organizations with four or more workloads increased over 40 year over year U K retailer Fraser Group for example consolidated from 10 security vendors to just Microsoft Roku moved identity and access management to the cloud with Azure Active Directory And Estella Pharma Ferrovial and University of Toronto all switched to Microsoft Sentinel because of our integrated XDR and SIM capabilities Now on to LinkedIn People and companies continue to look to LinkedIn to connect learn sell and get hired We once again saw record engagement among our more than 900 million members Three members are signing up every second Over 80 of these members are from outside the United States And as the members come to the platform to find and share professional knowledge and expertise newsletter creation was up 10x year over year Skills are the new currency and people are increasingly investing in their skill building to keep up with their changing roles in industries We offer more than 20 000 courses in 11 languages and companies are also turning to a skills based approach in place of degree or pedigree to identify qualified talent with more than 45 of the hires on LinkedIn explicitly using skills data to fill their roles Finally LinkedIn Marketing Solutions continues to be a leader in B2B digital advertising helping companies deliver the right message to the right audience on a safe and trusted platform Now on to advertising Despite headwinds in the ad market we continue to innovate across our first and third party portfolios Our browser Microsoft Edge gained share for the seventh consecutive quarter Bing continues to gain share in the United States and daily users of our Start personalized content feed increased over 30 year over year We are now empowering retailers and expanding our third party inventory With PromoteIQ we are building a complete omnichannel media platform for companies like the Australian retailer Endeavor as well as Canada s Hudson s Bay and Global the largest Brazilian TV broadcasters chose Xandr to launch a new media buying platform in that market Now on to gaming In gaming we continue to pursue our ambition to give players more choice to play great games wherever whenever and however they want We saw new highs for Game Pass subscriptions game streaming hours and monthly active devices and monthly active users surpassed a record 120 million during the quarter We continue to invest to add value to Game Pass This quarter we partnered with Riot Games to make the company s PC and mobile games along with premium content available to subscribers And finally we are energized by our upcoming lineup of AAA game launches including exciting new titles from ZeniMax and Xbox Game Studios and we ll be sharing details in gameplay at our showcase tomorrow In closing I want to extend my deepest gratitude to our employees for their continued dedication to our mission customers and partners We will continue to pursue our long term opportunity and innovation agenda with urgency while also raising the bar on our operational excellence With that I ll hand it over to Amy Thank you Satya and good afternoon everyone I d like to start by reiterating Satya s thoughts on the changing environment and our priorities which underpin the decisions communicated in last week s announcement The resulting Q2 charge negatively impacted gross margin by 152 million operating income by 1 2 billion and earnings per share by 0 12 Our second quarter revenue was 52 7 billion up 2 and 7 in constant currency When adjusted for the charge gross margin dollars increased 2 and 8 in constant currency operating income decreased 3 and increased 6 in constant currency and earnings per share was 2 32 which decreased 6 and increased 2 in constant currency In our consumer business the PC market was in line with our expectations but execution challenges impacted our Surface business Advertising spend declined slightly more than expected which impacted search and news advertising and LinkedIn Marketing Solutions In our commercial business we delivered strong growth in line with our expectations However as you heard from Satya we are seeing customers exercise caution in this environment and we saw results weaken through December We saw moderated consumption growth in Azure and lower than expected growth in new business across the stand alone Office 365 EMS and Windows commercial products that are sold outside the Microsoft 365 suite From a geographic perspective we saw strong execution in many regions around the world However performance in the U S was weaker than expected Importantly we continued to see share gains in areas such as data and AI Dynamics Teams Security and Edge Commercial bookings increased 7 and 4 in constant currency lower than expected Consistent execution across our renewal sales motions including strong recapture rates and growth in Azure commitments on a high prior year comparable were partially offset by the slowdown in growth of new stand alone business noted earlier Commercial remaining performance obligation increased 29 to 26 in constant currency to 189 billion Roughly 45 will be recognized in revenue in the next 12 months up 24 year over year The remaining portion which will be recognized beyond the next 12 months increased 32 Our annuity mix increased two points year over year to 96 FX decreased total company revenue by five points in line with expectations At a segment level FX decreased Productivity and Business Processes revenue growth by six points one point favorable to expectations FX impact on Intelligent Cloud and More Personal Computing were both in line with expectations Additionally FX decreased both COGS and operating expense growth by two points one point unfavorable to expectations Microsoft Cloud revenue was 27 1 billion and grew 22 and 29 in constant currency ahead of expectations Microsoft Cloud gross margin percentage increased roughly two points year over year to 72 a point better than expected driven by lower energy costs Excluding the impact of the change in accounting estimate for useful lives Microsoft Cloud gross margin percentage decreased roughly one point primarily driven by sales mix shift to Azure Company gross margin percentage was 67 Excluding the impact of the change in accounting estimate gross margin percentage decreased roughly two points driven by a lower mix of Windows OEM revenue and sales mix shift from licensing to cloud Operating expense when adjusted for the Q2 charge increased 11 and 13 in constant currency about 500 million lower than expected Operating expense growth was driven by investments in cloud engineering the Nuance acquisition and LinkedIn At a total company level headcount ended December 19 higher than a year ago Sequential headcount growth was less than 1 Year over year growth included roughly six points from the Nuance and Xandr acquisitions which closed last Q3 and Q4 respectively Adjusted for the charge operating margins decreased roughly two points year over year to 41 Excluding the impact of the change in accounting estimate operating margins declined roughly four points primarily driven by unfavorable FX impact as well as a lower mix of OEM revenue Now to our segment results Revenue from Productivity and Business Processes was 17 billion and grew 7 and 13 in constant currency in line with expectations when excluding the favorable FX impact noted earlier Office Commercial revenue grew 7 and 14 in constant currency Office 365 Commercial revenue increased 11 and 18 in constant currency slightly better than expected with healthy renewal execution and ARPU growth as E5 momentum remains strong Paid Office 365 Commercial seats grew 12 year over year with installed base expansion across all workloads and customer segments Seat growth was driven by our small and medium business and frontline worker offerings although we saw some impact from the slowdown in growth of new business noted earlier Office Consumer revenue declined 2 and increased 3 in constant currency with continued momentum in Microsoft 365 subscriptions which grew 12 to 63 2 million partially offset by declines in our transactional business LinkedIn revenue increased 10 and 14 in constant currency driven by growth in Talent Solutions partially offset by weakness in Marketing Solutions from the advertising trends noted earlier Dynamics revenue grew 13 and 20 in constant currency driven by Dynamics 365 which grew 21 and 29 in constant currency Segment gross margin dollars increased 8 and 16 in constant currency and gross margin percentage increased roughly one point year over year Excluding the impact of the change in accounting estimate gross margin percentage decreased slightly driven by sales mix shift to cloud offerings Operating expense increased 12 and 14 in constant currency including roughly five points from the Q2 charge Operating income increased 6 and 17 in constant currency as the three points of favorable impact due to the change in accounting estimate were offset by three points of unfavorable impact from the Q2 charge noted earlier Next the Intelligent Cloud segment Revenue was 21 5 billion increasing 18 and 24 in constant currency in line with expectations Overall server products and cloud services revenue increased 20 and 26 in constant currency Azure and other cloud services revenue grew 31 and 38 in constant currency As noted earlier growth continued to moderate particularly in December and we exited the quarter with Azure constant currency growth in the mid 30s In our per user business the Enterprise Mobility and Security installed base grew 16 to over 241 million seats with impact from the slowdown in growth of new business noted earlier In our on premises server business revenue decreased 2 and increased 2 in constant currency with continued hybrid demand offset by weakness in transactional licensing Enterprise Services revenue grew 2 and 7 in constant currency Segment gross margin dollars increased 17 and 23 in constant currency and gross margin percentage decreased slightly Excluding the impact of the change in accounting estimate gross margin percentage declined roughly three points driven by sales mix shift to Azure and higher energy costs Operating expenses increased 34 and 37 in constant currency including roughly 13 points of impact from the Q2 charge noted earlier and roughly seven points of impact from the Nuance acquisition Operating income grew 7 and 15 in constant currency as roughly seven points of favorable impact of the change in accounting estimate was offset by approximately seven points of unfavorable impact from the Q2 charge Now to More Personal Computing Revenue was 14 2 billion decreasing 19 and 16 in constant currency below expectations driven by Surface Windows Commercial and search Windows OEM revenue decreased 39 year over year in line with expectations Excluding the impact from the Windows 11 deferral last year revenue declined 36 on a strong prior year comparable Devices revenue decreased 39 to 34 in constant currency below expectations due to execution challenges on new product launches Windows Commercial products and cloud services revenue declined 3 and increased 3 in constant currency lower than expected primarily due to the slowdown in growth of new business and stand alone offerings noted earlier Search and news advertising revenue ex TAC increased 10 and 15 in constant currency a bit lower than expected as noted earlier Our Edge browser gained more share than expected this quarter The Xandr acquisition contributed roughly six points of benefit And in gaming revenue declined 13 and 9 in constant currency in line with expectations Xbox hardware revenue declined 13 and 9 in constant currency Xbox content and services revenue declined 12 and 8 in constant currency given the strong first party content last year Segment gross margin dollars declined 29 and 24 in constant currency and gross margin percentage decreased roughly seven points year over year driven by lower device gross margin and sales mix shift to lower margin businesses Operating expenses increased 6 and 9 in constant currency including roughly six points of impact from the Q2 charge noted earlier and three points of impact from the Xandr acquisition Operating income decreased 47 and 40 in constant currency including roughly six points of unfavorable impact from the Q2 charge noted earlier Now back to total company results Capital expenditures including finance leases were 6 8 billion to support cloud demand Cash paid for PP amp E was 6 3 billion Cash flow from operations was 11 2 billion down 23 year over year as strong cloud billings and collections were more than offset by a tax payment related to the TCJA capitalization of R amp D provision as well as higher employee and supplier payments Free cash flow was 4 9 billion down 43 year over year Excluding the impact of this tax payment cash flow from operations declined 7 and free cash flow declined 16 This quarter other income and expense was negative 60 million lower than anticipated driven by a mark to market loss on a forward share purchase agreement Our effective tax rate was approximately 19 And finally we returned 9 7 billion to shareholders through share repurchases and dividends Now moving to our Q3 outlook which unless specifically noted otherwise is on a U S dollar basis My commentary for both the full year and next quarter does not include any impact from Activision which we continue to work toward closing in fiscal year 2023 subject to obtaining required regulatory approvals First FX Based on current rates we now expect FX to decrease total revenue growth by approximately three points COGS growth by one point and operating expense growth by two points Within the segments we anticipate roughly four points of negative impact on revenue growth in Productivity and Business Processes three points in Intelligent Cloud and two points in More Personal Computing In our Consumer business Windows OEM and devices will see continued declines as the PC market returns to pre pandemic levels And LinkedIn and search will be impacted as ad market spending remains a bit cautious In our Commercial business we expect business trends that we saw at the end of December to continue into Q3 While customers are more cautious in their spend we also have the opportunity to improve our execution given our strong position in global growth markets In commercial bookings with a declining expiry base and the strong prior year comparable in terms of large Azure contracts we expect growth to be relatively flat over year We expect consistent execution across our core and sales motions and continued commitments to our platform will be offset by impact from the slowdown of new business noted earlier and three points of unfavorable impact from the inclusion of Nuance in the prior year Microsoft Cloud gross margin percentage should be up roughly one point year over year driven by the accounting estimate change noted earlier Excluding that impact Q3 cloud gross margin percentage will decrease roughly one point driven by Azure In capital expenditures we expect a sequential increase on a dollar basis with normal quarterly spend variability in the timing of our cloud infrastructure build out Our data center investments continue to be based on a near term and longer term customer demand including AI opportunities Next segment guidance In Productivity and Business Processes we expect revenue to grow between 11 and 13 in constant currency or 16 9 billion to 17 2 billion In Office Commercial revenue growth will again be driven by Office 365 with seat growth across customer segments and ARPU growth through E5 We expect Office 365 revenue growth to be sequentially lower by roughly one point on a constant currency basis In our on premises business we expect revenue to decline in the mid 20s In Office Consumer we expect revenue growth in the low single digits driven by Microsoft 365 subscriptions For LinkedIn we expect mid single digit revenue growth with continued strong engagement on the platform although impacted by the advertising trends noted earlier and the slowdown in hiring particularly in the technology industry where we have significant exposure And in Dynamics we expect revenue growth to be in the low to mid teens driven by continued growth in Dynamics 365 which is now over 80 of total Dynamics revenue For Intelligent Cloud we expect revenue to grow between 17 and 19 in constant currency or 21 7 billion to 22 billion Revenue will continue to be driven by Azure which as a reminder can have quarterly variability primarily from our per user business and from in period revenue recognition depending on the mix of contracts In Azure our per user business should continue to benefit from Microsoft 365 suite momentum though we expect continued moderation in growth rate given the size of the installed base As I noted earlier we exited Q2 with Azure growth in the mid 30s in constant currency And from that we expect Q3 growth to decelerate roughly four to five points in constant currency FX impact in Azure is about one point more than at the segment level In our on premises server business we expect revenue to decline low single digits as demand for our hybrid solutions will be more than offset by unfavorable FX impact And in Enterprise Services revenue should decline low to mid single digits driven by Microsoft Consulting Services In More Personal Computing we expect revenue of 11 9 billion to 12 3 billion Windows OEM revenue should decline in the mid to high 30s in line with the PC market We expect Q3 PC units to be similar to pre pandemic levels In devices revenues should decline in the mid 40s as we work through the execution challenges noted earlier In Windows Commercial products and cloud services on a strong prior year comparable revenue should be relatively flat as customer demand for Microsoft 365 and our advanced security solutions will be partially offset by the slowdown in new business noted earlier Search and news advertising ex TAC should grow high single digits roughly seven points faster than overall search and news advertising revenue driven by continued volume strength supported by Edge browser share gains and the inclusion of Xandr And in gaming on a prior year comparable that benefited from increased console supply we expect revenue to decline in the high single digits We expect Xbox content and services revenue to decline in the low single digits as growth in Xbox Game Pass subscriptions will be more than offset by lower monetization per hour and third party and first party content Now back to company guidance We expect COGS to grow between 1 and 2 in constant currency or to be between 15 65 billion and 15 85 billion and operating expense to grow between 11 and 12 at constant currency or be 14 7 billion to 14 8 billion Other income and expense should be roughly 200 million as interest income is expected to more than offset interest expense As a reminder we are required to recognize mark to market gains and losses on our equity portfolio which can increase quarterly volatility We expect our Q3 effective tax rate to be between 19 and 20 And finally as a reminder for Q3 cash flow we expect to make a 1 2 billion cash tax payment related to the TCJA capitalization of R amp D provision Now some thoughts on H2 and the full year First in our Commercial business revenue grew 20 on a constant currency basis in H1 However we now expect to see a deceleration in H2 given how we exited December Next higher energy costs for the full year are now expected to be 500 million compared to our previous estimate of 800 million Third as we continue to prioritize our investments and anniversary the Nuance and Xandr acquisitions our Q4 operating expense growth should be in the low single digits in constant currency Finally we remain committed to operational excellence aligning cost and growth investing in our customer success and leading the AI platform wave As a result when excluding the Q2 charge and favorable impact from the change in accounting estimate we expect full year operating margins to be down roughly one point in constant currency and roughly two points in USD even with the headwinds from materially lower OEM revenue and higher energy costs In the first half of the year over 70 of our revenue came from our Commercial business and over 70 of that from Microsoft Cloud We have a resilient foundation and durable growth markets where we are gaining share I m confident in the ability of our Microsoft team to manage the near term by continuing to position ourselves for the future With that let s go to Q amp A Brett Thanks Amy We ll now move over to the Q amp A Out of respect for others on the call we request that participants please only ask one question Joe can you please repeat your instructions Ladies and gentlemen at this time we will be conducting a question and answer session Operator instructions Our first question comes from the line of Keith Weiss with Morgan Stanley Please proceed Excellent Thank you guys for taking the question I was hoping we could delve into the expansion of the investment into OpenAI Satya I was hoping you could talk to us about is there any expansion in the scope of what you guys are doing with OpenAI and the commitment that you guys are making in terms of sort of the compute capacity you re going to be giving to them And then maybe as from an investor s perspective how should we think about when this functionality is going to become expand beyond just sort of the Azure OpenAI services And where are we going to start to see some of the positive impacts to perhaps Bing or the productivity suite or more broadly across the solution portfolio Thank you so much Keith for the question So as you know we started the OpenAI partnership now in three years three and a half years ago And we ve been actually working very hard on a lot of elements of this partnership over the last three years And so I think the way for our investors to see this is we fundamentally believe that the next big platform wave as I said is going to be AI and be strong We also believe a lot of the enterprise value gets created by just being able to catch these waves and then have those waves impact every part of our tech stack and also create new solutions and new opportunities So whenever we think about platform opportunities and platform shift opportunities that s how we come at it How can we essentially ride the wave for everything that we have today and make it more expansive and then what can be created So if you take that lens the core of Azure or what is considered cloud computing fundamentally changes in its nature and how compute storage and network come together That s in some sense under the radar if you will for the last three and a half four years we ve been working very very hard to build both the training supercomputers and now of course the inference infrastructure because once you use AI inside of your applications it goes from just being training heavy to inference So I think core Azure itself is being transformed for the core infrastructure business It s being transformed And so you can see us with data beyond Azure OpenAI services even think about what Synapse plus OpenAI APIs can do We already have Power Platform incorporated capability You could prompt a I mean one of the reasons why we are the leaders in robotic process automation and workflow automation today is because of some of the AI capabilities that we have in there GitHub Copilot is in fact you would say the most at scale LLM based product out there in the marketplace today And so we fully expect us to sort of incorporate AI in every layer of the stack whether it s in productivity whether it s in our consumer services And so we re excited about it But I think that we re also excited about OpenAI innovation right So they commercialize their products We re excited about the ChatGPT being built on Azure and having the traction it has So we look to both there s an investment part to it and there s a commercial partnership But fundamentally it s going to be something that s going to drive I think innovation and competitive differentiation in every one of the Microsoft solutions by leading in AI Outstanding Thank you guys Thanks Joe next question please Our next question comes from the line of Brent Thill with Jefferies Please proceed Thanks Satya can you give us your overall macro view There were some comments you had made that concerned I think many about the state of the U S spending environment I m just curious if you could comment and follow up on what you re seeing there just from a spend environment throughout the year I think many came away with that seeming that you were saying it s getting worse not better Can you just give us a little more color on that Thank you Thank you Brent and first of all I was making a comment which is sort of a global comment not just a specific U S comment I mean there is only I always sort of subscribe to that there s only one law of gravity that I think all of us are subject to which is inflation adjusted economic growth in the world And then how many times that do we grow Because as I said in my I fundamentally believe tech as a percentage of GDP is going to be much higher and on a secular basis So the question is how many times is it given the overall inflation adjusted economic growth So that s kind of how I look at it Given that I think the two things that we see we commented on that even in the last quarter and it s even in the outlook which is the thing that customers are doing is what they accelerated during the pandemic They are making sure that they re getting most value out of it or optimizing it And then also being a bit more cautious on given the macroeconomic headwinds out there in the market So given those two things the point is at some point the optimizations will end In fact the money that they save in any optimization of any workload is what they into workloads And those workloads will start ramping up And so one of the key things we are watching for Brent is to make sure that we are gaining share in this space through our value propositions and even build loyalty with our customers so that long term we are well positioned for share gains So that s sort of fundamentally how we view it And then the other aspect I d also say is simultaneously investing in this new AI trend because I don t think any application start that happens next is going to look like the application starts of 2019 or 2020 They re all going to have considerations around how is my AI inference performance cost model is going to look like And that s where we are well positioned again So that s how I view it The market you all are better readers of quite frankly what s happening out there We can tell you what we see What we see is optimization and some cautious approach to new workloads and that will cycle through but we do fundamentally believe on a long term basis as a percentage of GDP tech spend is going to go up Thanks Brent Joe next question please Our next question comes from the line of Mark Moerdler with Bernstein Please proceed Thank you very much I d like to follow up a little bit on this question relating to optimization I know we saw some slowing this quarter You re guiding to some slowing next quarter in Cloud and Azure How much of that is do you believe at this point is truly people optimizing what they ve already bought and stepping that before that versus how much of that is due to macro factors themselves specifically impacting demand I d say two things and then Amy please feel free to add One is it absolutely is starts with workloads that they have at scale just because of the visibility one has on what s driving essentially the consumption meters And there s real guidance that we ourselves in the product to say here are the things that you do optimize your billing And so that s sort of what is the fundamental thing When we say do more with less and how can we help that s sort of the first place customers go to And then the next piece really I think is going to be about how they take the optimization that they get and the savings they get workload and what new project starts And that s where I think there s a reprioritization When should we start the new projects Those are the two things that are happening simultaneously They don t perfectly match but one of the things is they re looking to back some savings on some workloads and then start So that s where I think a little bit of what has to happen is the cycle time where the optimization cycle finishes the projects start and then the projects ramp And I think that that s what at least on the cloud consumption side you re seeing And on the per user side it s slightly different which is in per user also there was real acceleration when it comes to purchases of per user licenses whether it is for knowledge workers or frontline workers And again they re all now making sure that they re all getting used and the usage is going up Like when we look at our Office 365 usage all those numbers are pretty up year over year in a substantial way Like I gave you some of the Teams numbers In fact one of the things was what will have Teams usage after the pandemic Guess what They re up And so those are the good news And now once we cycle through that again the seats will get added and premium like I m very very excited about Teams Pro coming out in a couple of weeks And those are all the things that people will be able to sort of use to ensure that the ARPUs are also going up a bit value And Mark because I do think it s actually quite hard to separate from a driver perspective how much is optimization versus macro It s all related when you start to say what s the best ROI I can get on every budget dollar I spend and our job as a partner to so many of these customers is to help them do that So Satya has talked a bit about Azure Let me talk a little bit about the per user where the way it showed itself is we had very high renewal rates and very good suite performance at renewal meaning what we tend to call internally recapture While we had some more challenges on maybe a stand alone sale of a new product where the cycle is going to be a little longer right and you re going to have to show that cost savings But the suite sale the value in that showed itself in terms of strong E5 You can see the ARPU growth and you can see the consistency potentially in both renewal rate and in frankly the Microsoft 365 performance Perfect Thank you very much Yeah Thanks Mark Joe next question please Our next question comes from the line of Kash Rangan with Goldman Sachs Please proceed Thank you very much Satya I m curious if you could talk about how long the cycle time for optimization lasts Are we talking a couple of quarters few quarters or multiple years Because I do take your comment about tech spending as a percentage of global GDP going higher So if that were to happen this how do you frame the duration of this optimization that s happening in the industry Thank you so much I mean you know I think that you can you have a workload you optimize the workload and you start a new workload So the thing that I would say is when you re done with optimizing a workload is when you are done with the cycle So I think if you sort of say when did we enter this we accelerated workloads during the pandemic over a period of two years So we are optimizing I don t think we re going to take two years to optimize but we re going to take this year to optimize And then as we optimize the new projects start and the new project starts don t start instantly at their peak usage They start and then they scale And so those are the two cycles that will happen where there will be a time lag Got it So it s a temporary adjustment before we start to get the full effect of the next set of workloads Good to get that That s correct That s correct Thanks Kash Joe next question please The next question comes from the line of Karl Keirstead with UBS Please proceed Thank you This one for Amy Amy given the obviously tough environment it sounds like reaching that full fiscal year 20 constant currency Commercial revs guide would be tough Is that also true for the soft guidance for 10 plus total revenue growth for the year And if I could just sneak in a clarification Amy just because it s an important metric When you talk about a four to five point decel in Azure that s off of the 38 reported for December right not off the 35 exit rate Thank you It s all Karl let me just the first half of your question give me a second On the second half of your question which is the guide off the exit rate it s off the exit rate on Azure of four to five points just to make sure that is clear In terms of thinking about total year revenue right I did not comment on full year revenue as we continue I think really just to watch the Windows PC market as it returns to pre pandemic levels Outside of that as you can see the trends are relatively consistent So in some points it s important because if you look at the operating income margin guidance that I talked about the fact that we are guiding to really only one point of margin deceleration for the year on a constant currency basis with probably over 2 billion of headwind from the OEM business from what we had anticipated heading into the year the focus on margins the focus on prioritization the focus on putting our investments into where we know they have high return I actually feel quite good about the place that puts us in as we exit the year in terms of and the right energy right or leaving the year in Q4 on leverage Got it Super helpful Thanks Amy Thanks Karl Joe next question please Our next question comes from the line of Brad Zelnick with Deutsche Bank Please proceed Great Thanks very much Amy I wanted to ask about the expense actions that you announced last week Obviously not a decision that you would take lightly How are you thinking about headcount for the remainder of the year and the possibility for further expense actions if necessary And what criteria do you consider in making these decisions Thanks Brad listen thanks for that question Obviously as we think about the Q4 guidance around low single digit operating expense growth we start to as you know sort of lap certain real acceleration points that we had last year And we lapped the acquisitions both of Nuance and of Xandr So by the time that we get to the end of Q4 you ll see very moderated headcount growth on a year over year basis in addition to some the prioritization decisions we ve made And you re right We take decisions like the one we had to make to get our cost structure more in line with revenue just incredibly seriously because we have lots of very talented people who were impacted by that And so I do think that we feel confident in that exit rate As I said it will certainly imply that year over year growth as we lap some of the investments that we ve made will be quite small Thanks for the color Thanks Brad Joe next question please Our next question comes from the line of Brad Reback with Stifel Please proceed Great Thanks very much On Office 365 Commercial with you guys approaching 400 million seats and the E5 business really starting to accelerate here on that consolidated sort of expense ROI that you re putting forth should we think about the growth there more evenly balanced between seats and ARPU going forward or still to continue to favor seats Thanks Yes That s a good question especially because this quarter you started to see a little bit more of that ARPU influence And as you might have gathered from your question and I ll just reinforce it as we see some of this moderating seat growth whether that s some of the new SKU weakness that we had talked about some of the stand alone stuff you re starting to also see E5 ARPU happen at the same time So it does create some stability in that Office 365 Commercial revenue number So we re seeing still good seat growth still growth across all workloads And as you re pointing out we re getting further into the E5 health where we ve seen I want to say four or five really good quarters of E5 adoption The value there is just very high for customers in this environment between analytics security and I think we ve given some I think good security data points in terms of adoption and voice This is a place where customers can save money by moving to this suite And I do think you re starting to see some of that ARPU help And we re also investing in outside of Microsoft 365 in other per user workloads We were a new suite Power Platform on its own and even stand alone offers like even Teams Pro and what have you So there s a significant amount of work we want to do besides sort of the suites that we all sort of have at scale Great Thank you very much Joe we have time for one last question Our next question comes from the line of Tyler Radke with Citi Please proceed Yes Thanks for taking the question I wanted to ask just about how your visibility has changed in terms of some of the larger Azure customer ramps Could you just comment on to the extent those large customer ramps or if any of those projects are getting put on pause And then is there any way to just kind of quantify the AI potential contribution or maybe GPU powered contribution that Azure that you re expecting over the coming quarters Thank you On the second piece I think it s too early to sort of start somehow separating out AI from the rest of the workload I mean even the workloads themselves AI is just going to be a core part of a workload in Azure versus just AI alone So in other words if you have an application that s using a bunch of inference let s say it s also going to have a bunch of storage and it s going to have a bunch of other compute beyond GPU inferencing if you will So I think over time obviously I think every app is going to be an AI app Ladies and gentlemen please stand by That wraps up the Q amp A portion of today s earnings call Thank you for joining us today and we look forward to speaking with all of you soon This article is a transcript of this conference call produced for The Motley Fool While we strive for our Foolish Best there may be errors omissions or inaccuracies in this transcript As with all our articles The Motley Fool does not assume any responsibility for your use of this content and we strongly encourage you to do your own research including listening to the call yourself and reading the company s SEC filings Please see our Terms and Conditions for additional details including our Obligatory Capitalized Disclaimers of Liability Average returns of all recommendations since inception Cost basis and return based on previous market day close Invest better with The Motley Fool Get stock recommendations portfolio guidance and more from The Motley Fool s premium services Credit https www fool com earnings call transcripts 2023 01 24 microsoft msft q2 2023 earnings call transcript
    Microsoft (MSFT) Q2 2023 Earnings Call Transcript
    General news5 days ago

    Microsoft (MSFT) Q2 2023 Earnings Call Transcript

    Image source: The Motley Fool.

    Greetings, and welcome to the Microsoft fiscal year 2023 second quarter earnings conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator instructions] As a reminder, this conference is being recorded.

    I would now like to turn the conference over to your host, Brett Iversen, vice president, investor relations.

    Good afternoon, and thank you for joining us today. On the call with me are Satya Nadella, chairman and chief executive officer; Amy Hood, chief financial officer; Alice Jolla, chief accounting officer; and Keith Dolliver, deputy general counsel. On the Microsoft Investor Relations website, you can find our earnings press release and financial summary slide deck, which is intended to supplement our prepared remarks during today's call and provides the reconciliation of differences between GAAP and non-GAAP financial measures. On this call, we will discuss certain non-GAAP items.

    The non-GAAP financial measures provided should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with GAAP. They are included as additional clarifying items to aid investors in further understanding the company's second-quarter performance in addition to the impact these items and events have on the financial results. All growth comparisons we make on the call today relate to the corresponding period of last year unless otherwise noted. We will also provide growth rates in constant currency when available as a framework for assessing how our underlying businesses performed, excluding the effect of foreign currency rate fluctuations.

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    Where growth rates are the same in constant currency, we'll refer to the growth rate only. We will post our prepared remarks to our website immediately following the call until the complete transcript is available. Today's call is being webcast live and recorded. If you ask a question, it will be included in our live transmission, in the transcript, and in any future use of the recording.

    You can replay the call and view the transcript on the Microsoft Investor Relations website. During this call, we'll be making forward-looking statements, which are predictions, projections, or other statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could materially differ because of factors discussed in today's earnings press release, in the comments made during this conference call, and in the Risk Factors section of our Form 10-K, Forms 10-Q, and other reports and filings with the Securities and Exchange Commission.

    We do not undertake any duty to update any forward-looking statement. And with that, I'll turn the call over to Satya.

    Thank you very much, Brett. I want to start with the context I shared with our employees last week on the changing environment and our priorities. As I meet with customers and partners, a few things are increasingly clear. Just as we saw customers accelerate their digital spend during the pandemic, we are now seeing them optimize that spend.

    Also, organizations are exercising caution given the macroeconomic uncertainty. And the next major wave of computing is being born as we turn the world's most advanced AI models into a new computing platform. In this environment, we remain convicted on three things. This is an important time for Microsoft to work with our customers, helping them realize more value from their tech spend and building long-term loyalty and share position while internally aligning our own cost structure with our revenue growth.

    This, in turn, sets us up to participate in the secular trend where digital spend as a percentage of GDP is only going to increase. And lastly, we're going to lead in the AI era, knowing that maximum enterprise value gets created during platform shifts. With that as a backdrop, the Microsoft Cloud exceeded $27 billion in quarterly revenue, up 22% and 29% in constant currency. Now I'll highlight examples of our innovation starting with Azure.

    Moving to the cloud is the best way for any customer in today's economy to mitigate demand uncertainty and energy costs while gaining efficiencies of cloud-native development. Enterprises have moved millions of cases to Azure and run twice as many calls on our cloud today than they did two years ago. And yet, we're still in the early innings when it comes to long-term cloud opportunity. As an example, insurer AIA was able to save more than 20% by migrating to Azure and reduced IT provisioning time from multiple months to just an hour.

    We also continue to lead with hybrid computing with Azure Arc. We now have more than 12,000 Arc customers, double the number a year ago, including companies like Citrix, Northern Trust, and PayPal. Now on to data. Customers continue to choose and implement the Microsoft Intelligent Data Platform over the competition because of its comprehensiveness, integration, and lower cost.

    Bayer, for example, used the data stack to evaluate results from clinical trials faster and more efficiently while meeting regulatory requirements, and ASOS chose Cosmos DB to power real-time product recommendations and order processing for over 26 million global customers. Now, on to AI. The age of AI is upon us and Microsoft is powering it. We are witnessing nonlinear improvements in capability of foundation models, which we are making available as platforms.

    And as customers select their cloud providers and invest in new workloads, we are well-positioned to capture that opportunity as a leader in AI. We have the most powerful AI supercomputing infrastructure in the cloud. It's being used by customers and partners like OpenAI to train state-of-the-art models and services, including ChatGPT. Just last week, we made our Azure OpenAI service broadly available, and already over 200 customers from KPMG to Al Jazeera are using it.

    We will soon add support for ChatGPT, enabling customers to use it in their own applications for the first time. And yesterday, we announced the completion of the next phase of our agreement with OpenAI. We are pleased to be their exclusive cloud provider, and we'll deploy their models across our consumer and enterprise products as we continue to push the state-of-the-art in AI. All of this innovation is driving growth across our Azure AI services.

    Azure ML revenue alone has increased more than 100% for five quarters in a row with companies like AXA, FedEx, and H&R Block choosing the service to deploy, manage and govern their models. Now, on to developers. Modernizing applications is mission-critical to any company's operations today. And with GitHub, Visual Studio, and Azure Pass services, we have the most comprehensive portfolio of tools to help.

    GitHub is now home to 100 million developers and GitHub Copilot is the first at-scale AI product built for this era, fundamentally transforming developer productivity. More than 1 million people have used Copilot to date. This quarter, we brought Copilot to businesses, and we have seen strong interest and early adoption from companies, including Duolingo, Lemonade, and Volkswagen CARIAD Software Group. Now, on to Power Platform.

    Power Platform is becoming an essential digital transformation tool as every business looks to streamline their operations and drive productivity in today's environment. We are helping customers realize superior time to value with our end-to-end suite spanning low-code, no-code tools, automation, virtual agents, and business intelligence. We are leading in robotic process automation. Power Automate has more than 45,000 customers from AT&T to Rabobank, up over 50% year over year.

    And we are making it easier for anyone to streamline repetitive tasks, introducing new AI-powered features to turn natural language prompts into complex workflows. Now, on to business applications. Dynamics 365 is taking share as we help businesses digitize their service, finance, customer experience, and supply chain functions. For example, J&J, Pepsi-Cola Bottlers is moving from reactive to predictive field service.

    Fuji Films is optimizing its operations. Investec is closing deals faster with conversational intelligence. Baylor Scott & White in Texas is using our digital contact center to enhance patient communications. And this quarter, we introduced our new supply chain platform, helping customers like iFit and Kraft Heinz apply AI to predict and mitigate disruptions.

    Now, on to Industry Solutions. Our industry and cross-industry clouds are driving pull-through for our entire tech stack. Our cloud for retail was front and center at NRF last week as we introduced new tools to help retailers manage their day-to-day operations and digitize their physical stores. Polish retailer Zabka has built the largest chain of autonomous stores in Europe with the help of our technology.

    In Financial Services, our new partnership with London Stock Exchange Group will deliver next generation of data analytics and workspace solutions. And in healthcare, we are rapidly becoming the partner of choice for any provider looking to generate real value from AI. With Nuance DAX ambient intelligence solution, physicians can reduce documentation time by half, improving the quality of their patient interactions. Now, on to systems of work.

    Microsoft 365, Teams, and Viva are essential for every organization to adapt to the new world of work. Microsoft 365 is rapidly evolving into an AI-first platform that enables every individual to amplify their creativity and productivity with both our established applications, as well as new applications like Designer, Stream, and Loop. We have more than 63 million consumer subscribers, up 12% year over year, and we introduced Microsoft 365 Basic, bringing our premium offerings to more people. Teams surpassed 280 million monthly active users this quarter, showing durable momentum since the pandemic, and we continue to take share across every category from collaboration to chat to meetings to calling.

    Teams has emerged as a first-class platform. Apps from Adobe, Atlassian, Poly, ServiceNow, and Workday have each surpassed 0.5 million active users, and the number of third-party apps with more than 10,000 users increased nearly 40% year over year. There are more than 500,000 active Teams Rooms devices, up 70% year over year, and the number of customers with more than 1,000 rooms doubled year over year. Novo Nordisk will deploy Teams Rooms to 5,000 meeting rooms globally in our largest deal to date.

    Teams Phone continues to take share and is the market leader in cloud calling. We have added more than 5 million PSTN seats over the last 12 months alone. With Teams Premium, we are meeting enterprise demand for advanced features like end-to-end encryption and AI-powered recaps. We have seen strong interest in preview, and we will make it broadly available next month.

    With Microsoft Viva, we have created a new market category for employee experience and organizational productivity. U.S. Bank is using Viva to streamline employee communications, and Carlsberg turned to Viva to centralize its digital employee experience for 29,000 employees. In today's environment, aligning the entire organization and the most important work is critical.

    Viva Goals brings objectives and key results directly into the flow of daily work. Viva has also become an indispensable tool for business process. Viva Sales is the super app in Microsoft 365 for sellers. We have seen strong interest since making it generally available this quarter.

    All up, we continue to see organizations consolidate on Microsoft 365. 80% of our enterprise customers use five or more Microsoft 365 applications. And organizations across the private and public sector, including EY, IKEA, NTT Communications, Rio Tinto, as well as the state government of Virginia are increasingly choosing our premium E5 offerings for advanced security, compliance, voice, and analytics. Now, on to Windows.

    While the number of PCs shipped declined during the quarter, returning to pre-pandemic levels, usage intensity of Windows continues to be higher than pre pandemic with time spent per PC up nearly 10%. Monthly active devices also reached an all-time high this quarter. And for commercial customers, Windows 11 adoption continues to grow because of its differentiated security and productivity value proposition. We're also seeing growth in cloud-delivered Windows with usage of Windows 365 and Azure Virtual Desktop up by over two-thirds year over year.

    Leaders in every industry from Campari and Grant Thornton U.K. to Nutrien and Woolworths are using cloud-delivered Windows, including more than 60% of the Fortune 500. Now, on to security. Over the past 12 months, our security business surpassed $20 billion in revenue as we help customers protect their digital estate across clouds and endpoint platforms.

    We're the only company with integrated end-to-end tools spanning identity, security, compliance, device management, and privacy informed and trained on over 65 trillion signals each day. We are taking share across all major categories we serve. Customers are consolidating on our security stack in order to reduce risk, complexity, and cost. The number of organizations with four or more workloads increased over 40% year over year.

    U.K. retailer Fraser Group, for example, consolidated from 10 security vendors to just Microsoft. Roku moved identity and access management to the cloud with Azure Active Directory. And Estella Pharma, Ferrovial, and University of Toronto all switched to Microsoft Sentinel because of our integrated XDR and SIM capabilities.

    Now, on to LinkedIn. People and companies continue to look to LinkedIn to connect, learn, sell, and get hired. We once again saw record engagement among our more than 900 million members. Three members are signing up every second.

    Over 80% of these members are from outside the United States. And as the members come to the platform to find and share professional knowledge and expertise, newsletter creation was up 10x year over year. Skills are the new currency and people are increasingly investing in their skill-building to keep up with their changing roles in industries. We offer more than 20,000 courses in 11 languages, and companies are also turning to a skills-based approach in place of degree or pedigree to identify qualified talent, with more than 45% of the hires on LinkedIn explicitly using skills data to fill their roles.

    Finally, LinkedIn Marketing Solutions continues to be a leader in B2B digital advertising, helping companies deliver the right message to the right audience on a safe and trusted platform. Now, on to advertising. Despite headwinds in the ad market, we continue to innovate across our first- and third-party portfolios. Our browser, Microsoft Edge gained share for the seventh consecutive quarter.

    Bing continues to gain share in the United States, and daily users of our Start personalized content feed increased over 30% year over year. We are now empowering retailers and expanding our third-party inventory. With PromoteIQ, we are building a complete omnichannel media platform for companies like the Australian retailer, Endeavor, as well as Canada's Hudson's Bay and Global, the largest Brazilian TV broadcasters chose Xandr to launch a new media buying platform in that market. Now, on to gaming.

    In gaming, we continue to pursue our ambition to give players more choice to play great games wherever, whenever, and however they want. We saw new highs for Game Pass subscriptions, game streaming hours, and monthly active devices, and monthly active users surpassed a record 120 million during the quarter. We continue to invest to add value to Game Pass. This quarter, we partnered with Riot Games to make the company's PC and mobile games, along with premium content available to subscribers.

    And finally, we are energized by our upcoming lineup of AAA game launches, including exciting new titles from ZeniMax and Xbox Game Studios, and we'll be sharing details in gameplay at our showcase tomorrow. In closing, I want to extend my deepest gratitude to our employees for their continued dedication to our mission, customers, and partners. We will continue to pursue our long-term opportunity and innovation agenda with urgency while also raising the bar on our operational excellence. With that, I'll hand it over to Amy.

    Thank you, Satya, and good afternoon, everyone. I'd like to start by reiterating Satya's thoughts on the changing environment and our priorities, which underpin the decisions communicated in last week's announcement. The resulting Q2 charge negatively impacted gross margin by $152 million, operating income by $1.2 billion, and earnings per share by $0.12. Our second quarter revenue was $52.7 billion, up 2% and 7% in constant currency.

    When adjusted for the charge, gross margin dollars increased 2% and 8% in constant currency, operating income decreased 3% and increased 6% in constant currency, and earnings per share was $2.32, which decreased 6% and increased 2% in constant currency. In our consumer business, the PC market was in line with our expectations, but execution challenges impacted our Surface business. Advertising spend declined slightly more than expected, which impacted search and news advertising and LinkedIn Marketing Solutions. In our commercial business, we delivered strong growth in line with our expectations.

    However, as you heard from Satya, we are seeing customers exercise caution in this environment, and we saw results weaken through December. We saw moderated consumption growth in Azure and lower-than-expected growth in new business across the stand-alone Office 365, EMS, and Windows commercial products that are sold outside the Microsoft 365 suite. From a geographic perspective, we saw strong execution in many regions around the world. However, performance in the U.S.

    was weaker than expected. Importantly, we continued to see share gains in areas such as data and AI, Dynamics, Teams, Security, and Edge. Commercial bookings increased 7% and 4% in constant currency, lower than expected. Consistent execution across our renewal sales motions, including strong recapture rates, and growth in Azure commitments on a high prior-year comparable were partially offset by the slowdown in growth of new stand-alone business noted earlier.

    Commercial remaining performance obligation increased 29% to 26% in constant currency to $189 billion. Roughly 45% will be recognized in revenue in the next 12 months, up 24% year over year. The remaining portion, which will be recognized beyond the next 12 months, increased 32%. Our annuity mix increased two points year over year to 96%.

    FX decreased total company revenue by five points, in line with expectations. At a segment level, FX decreased Productivity and Business Processes revenue growth by six points, one point favorable to expectations. FX impact on Intelligent Cloud and More Personal Computing were both in line with expectations. Additionally, FX decreased both COGS and operating expense growth by two points, one point unfavorable to expectations.

    Microsoft Cloud revenue was $27.1 billion and grew 22% and 29% in constant currency, ahead of expectations. Microsoft Cloud gross margin percentage increased roughly two points year over year to 72%, a point better than expected, driven by lower energy costs. Excluding the impact of the change in accounting estimate for useful lives, Microsoft Cloud gross margin percentage decreased roughly one point, primarily driven by sales mix shift to Azure. Company gross margin percentage was 67%.

    Excluding the impact of the change in accounting estimate, gross margin percentage decreased roughly two points, driven by a lower mix of Windows OEM revenue and sales mix shift from licensing to cloud. Operating expense when adjusted for the Q2 charge increased 11% and 13% in constant currency, about $500 million lower than expected. Operating expense growth was driven by investments in cloud engineering, the Nuance acquisition, and LinkedIn. At a total company level, headcount ended December 19% higher than a year ago.

    Sequential headcount growth was less than 1%. Year-over-year growth included roughly six points from the Nuance and Xandr acquisitions, which closed last Q3 and Q4, respectively. Adjusted for the charge, operating margins decreased roughly two points year over year to 41%. Excluding the impact of the change in accounting estimate, operating margins declined roughly four points, primarily driven by unfavorable FX impact, as well as a lower mix of OEM revenue.

    Now, to our segment results. Revenue from Productivity and Business Processes was $17 billion and grew 7% and 13% in constant currency, in line with expectations when excluding the favorable FX impact noted earlier. Office Commercial revenue grew 7% and 14% in constant currency. Office 365 Commercial revenue increased 11% and 18% in constant currency, slightly better than expected with healthy renewal execution and ARPU growth as E5 momentum remains strong.

    Paid Office 365 Commercial seats grew 12% year over year with installed base expansion across all workloads and customer segments. Seat growth was driven by our small and medium business and frontline worker offerings, although we saw some impact from the slowdown in growth of new business noted earlier. Office Consumer revenue declined 2% and increased 3% in constant currency, with continued momentum in Microsoft 365 subscriptions, which grew 12% to 63.2 million, partially offset by declines in our transactional business. LinkedIn revenue increased 10% and 14% in constant currency, driven by growth in Talent Solutions, partially offset by weakness in Marketing Solutions from the advertising trends noted earlier.

    Dynamics revenue grew 13% and 20% in constant currency, driven by Dynamics 365, which grew 21% and 29% in constant currency. Segment gross margin dollars increased 8% and 16% in constant currency, and gross margin percentage increased roughly one point year over year. Excluding the impact of the change in accounting estimate, gross margin percentage decreased slightly, driven by sales mix shift to cloud offerings. Operating expense increased 12% and 14% in constant currency, including roughly five points from the Q2 charge.

    Operating income increased 6% and 17% in constant currency as the three points of favorable impact due to the change in accounting estimate were offset by three points of unfavorable impact from the Q2 charge noted earlier. Next, the Intelligent Cloud segment. Revenue was $21.5 billion, increasing 18% and 24% in constant currency, in line with expectations. Overall, server products and cloud services revenue increased 20% and 26% in constant currency.

    Azure and other cloud services revenue grew 31% and 38% in constant currency. As noted earlier, growth continued to moderate, particularly in December, and we exited the quarter with Azure constant-currency growth in the mid-30s. In our per-user business, the Enterprise Mobility and Security installed base grew 16% to over 241 million seats with impact from the slowdown in growth of new business noted earlier. In our on-premises server business, revenue decreased 2% and increased 2% in constant currency, with continued hybrid demand offset by weakness in transactional licensing.

    Enterprise Services revenue grew 2% and 7% in constant currency. Segment gross margin dollars increased 17% and 23% in constant currency, and gross margin percentage decreased slightly. Excluding the impact of the change in accounting estimate, gross margin percentage declined roughly three points, driven by sales mix shift to Azure and higher energy costs. Operating expenses increased 34% and 37% in constant currency, including roughly 13 points of impact from the Q2 charge noted earlier and roughly seven points of impact from the Nuance acquisition.

    Operating income grew 7% and 15% in constant currency as roughly seven points of favorable impact of the change in accounting estimate was offset by approximately seven points of unfavorable impact from the Q2 charge. Now, to More Personal Computing. Revenue was $14.2 billion, decreasing 19% and 16% in constant currency, below expectations driven by Surface, Windows Commercial, and search. Windows OEM revenue decreased 39% year over year, in line with expectations.

    Excluding the impact from the Windows 11 deferral last year, revenue declined 36% on a strong prior-year comparable. Devices revenue decreased 39% to 34% in constant currency, below expectations due to execution challenges on new product launches. Windows Commercial products and cloud services revenue declined 3% and increased 3% in constant currency, lower than expected, primarily due to the slowdown in growth of new business and stand-alone offerings noted earlier. Search and news advertising revenue ex TAC increased 10% and 15% in constant currency, a bit lower than expected, as noted earlier.

    Our Edge browser gained more share than expected this quarter. The Xandr acquisition contributed roughly six points of benefit. And in gaming, revenue declined 13% and 9% in constant currency, in line with expectations. Xbox hardware revenue declined 13% and 9% in constant currency.

    Xbox content and services revenue declined 12% and 8% in constant currency, given the strong first-party content last year. Segment gross margin dollars declined 29% and 24% in constant currency, and gross margin percentage decreased roughly seven points year over year, driven by lower device gross margin and sales mix shift to lower-margin businesses. Operating expenses increased 6% and 9% in constant currency, including roughly six points of impact from the Q2 charge noted earlier and three points of impact from the Xandr acquisition. Operating income decreased 47% and 40% in constant currency, including roughly six points of unfavorable impact from the Q2 charge noted earlier.

    Now back to total company results. Capital expenditures, including finance leases, were $6.8 billion to support cloud demand. Cash paid for PP&E was $6.3 billion. Cash flow from operations was $11.2 billion, down 23% year over year as strong cloud billings and collections were more than offset by a tax payment related to the TCJA capitalization of R&D provision, as well as higher employee and supplier payments.

    Free cash flow was $4.9 billion, down 43% year over year. Excluding the impact of this tax payment, cash flow from operations declined 7% and free cash flow declined 16%. This quarter, other income and expense was negative $60 million, lower than anticipated, driven by a mark-to-market loss on a forward share purchase agreement. Our effective tax rate was approximately 19%.

    And finally, we returned $9.7 billion to shareholders through share repurchases and dividends. Now, moving to our Q3 outlook, which, unless specifically noted otherwise, is on a U.S. dollar basis. My commentary for both the full year and next quarter does not include any impact from Activision, which we continue to work toward closing in fiscal year 2023, subject to obtaining required regulatory approvals.

    First, FX. Based on current rates, we now expect FX to decrease total revenue growth by approximately three points, COGS growth by one point, and operating expense growth by two points. Within the segments, we anticipate roughly four points of negative impact on revenue growth in Productivity and Business Processes, three points in Intelligent Cloud, and two points in More Personal Computing. In our Consumer business, Windows OEM and devices will see continued declines as the PC market returns to pre-pandemic levels.

    And LinkedIn and search will be impacted as ad market spending remains a bit cautious. In our Commercial business, we expect business trends that we saw at the end of December to continue into Q3. While customers are more cautious in their spend, we also have the opportunity to improve our execution, given our strong position in global growth markets. In commercial bookings, with a declining expiry base and the strong prior-year comparable in terms of large Azure contracts, we expect growth to be relatively flat over year.

    We expect consistent execution across our core and sales motions and continued commitments to our platform will be offset by impact from the slowdown of new business noted earlier and three points of unfavorable impact from the inclusion of Nuance in the prior year. Microsoft Cloud gross margin percentage should be up roughly one point year over year, driven by the accounting estimate change noted earlier. Excluding that impact, Q3 cloud gross margin percentage will decrease roughly one point, driven by Azure. In capital expenditures, we expect a sequential increase on a dollar basis with normal quarterly spend variability in the timing of our cloud infrastructure build-out.

    Our data center investments continue to be based on a near-term and longer-term customer demand, including AI opportunities. Next, segment guidance. In Productivity and Business Processes, we expect revenue to grow between 11% and 13% in constant currency, or $16.9 billion to $17.2 billion. In Office Commercial, revenue growth will again be driven by Office 365 with seat growth across customer segments and ARPU growth through E5.

    We expect Office 365 revenue growth to be sequentially lower by roughly one point on a constant-currency basis. In our on-premises business, we expect revenue to decline in the mid-20s. In Office Consumer, we expect revenue growth in the low single digits, driven by Microsoft 365 subscriptions. For LinkedIn, we expect mid-single-digit revenue growth with continued strong engagement on the platform, although impacted by the advertising trends noted earlier and the slowdown in hiring, particularly in the technology industry, where we have significant exposure.

    And in Dynamics, we expect revenue growth to be in the low to mid-teens, driven by continued growth in Dynamics 365, which is now over 80% of total Dynamics revenue. For Intelligent Cloud, we expect revenue to grow between 17% and 19% in constant currency or $21.7 billion to $22 billion. Revenue will continue to be driven by Azure which, as a reminder, can have quarterly variability primarily from our per-user business and from in-period revenue recognition depending on the mix of contracts. In Azure, our per-user business should continue to benefit from Microsoft 365 suite momentum, though we expect continued moderation in growth rate given the size of the installed base.

    As I noted earlier, we exited Q2 with Azure growth in the mid-30s in constant currency. And from that, we expect Q3 growth to decelerate roughly four to five points in constant currency. FX impact in Azure is about one point more than at the segment level. In our on-premises server business, we expect revenue to decline low single digits as demand for our hybrid solutions will be more than offset by unfavorable FX impact.

    And in Enterprise Services, revenue should decline low to mid-single digits, driven by Microsoft Consulting Services. In More Personal Computing, we expect revenue of $11.9 billion to $12.3 billion. Windows OEM revenue should decline in the mid- to high 30s, in line with the PC market. We expect Q3 PC units to be similar to pre-pandemic levels.

    In devices, revenues should decline in the mid-40s as we work through the execution challenges noted earlier. In Windows Commercial products and cloud services on a strong prior-year comparable, revenue should be relatively flat as customer demand for Microsoft 365 and our advanced security solutions will be partially offset by the slowdown in new business noted earlier. Search and news advertising ex TAC should grow high single digits, roughly seven points faster than overall search and news advertising revenue, driven by continued volume strength supported by Edge browser share gains and the inclusion of Xandr. And in gaming, on a prior-year comparable that benefited from increased console supply, we expect revenue to decline in the high single digits.

    We expect Xbox content and services revenue to decline in the low single digits as growth in Xbox Game Pass subscriptions will be more than offset by lower monetization per hour and third-party and first-party content. Now, back to company guidance. We expect COGS to grow between 1% and 2% in constant currency or to be between $15.65 billion and $15.85 billion and operating expense to grow between 11% and 12% at constant currency or be $14.7 billion to $14.8 billion. Other income and expense should be roughly $200 million as interest income is expected to more than offset interest expense.

    As a reminder, we are required to recognize mark-to-market gains and losses on our equity portfolio, which can increase quarterly volatility. We expect our Q3 effective tax rate to be between 19% and 20%. And finally, as a reminder, for Q3 cash flow, we expect to make a $1.2 billion cash tax payment related to the TCJA capitalization of R&D provision. Now, some thoughts on H2 and the full year.

    First, in our Commercial business, revenue grew 20% on a constant-currency basis in H1. However, we now expect to see a deceleration in H2 given how we exited December. Next, higher energy costs for the full year are now expected to be $500 million compared to our previous estimate of $800 million. Third, as we continue to prioritize our investments and anniversary the Nuance and Xandr acquisitions, our Q4 operating expense growth should be in the low single digits in constant currency.

    Finally, we remain committed to operational excellence, aligning cost and growth, investing in our customer success, and leading the AI platform wave. As a result, when excluding the Q2 charge and favorable impact from the change in accounting estimate, we expect full-year operating margins to be down roughly one point in constant currency and roughly two points in USD, even with the headwinds from materially lower OEM revenue and higher energy costs. In the first half of the year, over 70% of our revenue came from our Commercial business and over 70% of that from Microsoft Cloud. We have a resilient foundation and durable growth markets where we are gaining share.

    I'm confident in the ability of our Microsoft team to manage the near term by continuing to position ourselves for the future. With that, let's go to Q&A. Brett?

    Thanks, Amy. We'll now move over to the Q&A. Out of respect for others on the call, we request that participants please only ask one question. Joe, can you please repeat your instructions?

    Ladies and gentlemen, at this time, we will be conducting a question-and-answer session. [Operator instructions] Our first question comes from the line of Keith Weiss with Morgan Stanley. Please proceed.

    Excellent. Thank you, guys, for taking the question. I was hoping we could delve into the expansion of the investment into OpenAI. Satya, I was hoping you could talk to us about, is there any expansion in the scope of what you guys are doing with OpenAI and the commitment that you guys are making in terms of sort of the compute capacity you're going to be giving to them? And then maybe as from an investor's perspective, how should we think about when this functionality is going to become -- expand beyond just sort of the Azure OpenAI services? And where are we going to start to see some of the positive impacts to perhaps Bing or the productivity suite or more broadly across the solution portfolio?

    Thank you so much, Keith, for the question. So, as you know, we started the OpenAI partnership now in three years, three and a half years ago. And we've been actually working very hard on a lot of elements of this partnership over the last three years. And so, I think the way for our investors to see this is we fundamentally believe that the next big platform wave, as I said, is going to be AI and be strong.

    We also believe a lot of the enterprise value gets created by just being able to catch these waves and then have those waves impact every part of our tech stack and also create new solutions and new opportunities. So, whenever we think about platform opportunities and platform shift opportunities, that's how we come at it. How can we essentially ride the wave for everything that we have today and make it more expansive and then what can be created? So, if you take that lens, the core of Azure, or what is considered cloud computing fundamentally changes in its nature and how compute, storage, and network come together. That's, in some sense, under the radar, if you will, for the last three and a half, four years, we've been working very, very hard to build both the training supercomputers and now, of course, the inference infrastructure because once you use AI inside of your applications, it goes from just being training-heavy to inference.

    So, I think core Azure itself is being transformed for the core infrastructure business. It's being transformed. And so, you can see us with data beyond Azure OpenAI services even, think about what Synapse plus OpenAI APIs can do. We already have Power Platform incorporated capability.

    You could prompt a -- I mean, one of the reasons why we are the leaders in robotic process automation and workflow automation today is because of some of the AI capabilities that we have in there. GitHub Copilot is, in fact, you would say, the most at-scale LLM-based product out there in the marketplace today. And so, we fully expect us to sort of incorporate AI in every layer of the stack, whether it's in productivity, whether it's in our consumer services. And so, we're excited about it.

    But I think that we're also excited about OpenAI innovation, right? So, they commercialize their products. We're excited about the ChatGPT being built on Azure and having the traction it has. So, we look to both, there's an investment part to it and there's a commercial partnership. But fundamentally, it's going to be something that's going to drive, I think, innovation and competitive differentiation in every one of the Microsoft solutions by leading in AI.

    Outstanding. Thank you, guys.

    Thanks. Joe, next question, please.

    Our next question comes from the line of Brent Thill with Jefferies. Please proceed.

    Thanks. Satya, can you give us your overall macro view? There were some comments you had made that concerned, I think, many about the state of the U.S. spending environment. I'm just curious if you could comment and follow up on what you're seeing there just from a spend environment throughout the year.

    I think many came away with that seeming that you were saying it's getting worse, not better. Can you just give us a little more color on that? Thank you.

    Thank you, Brent, and first of all, I was making a comment which is sort of a global comment, not just a specific U.S. comment. I mean, there is only -- I always sort of subscribe to that there's only one law of gravity that I think all of us are subject to, which is inflation-adjusted economic growth in the world. And then how many times that do we grow? Because as I said in my I fundamentally believe tech as a percentage of GDP is going to be much higher and on a secular basis.

    So, the question is, how many times is it given the overall inflation-adjusted economic growth? So, that's kind of how I look at it. Given that, I think the two things that we see, we commented on that even in the last quarter, and it's even in the outlook, which is the thing that customers are doing is what they accelerated during the pandemic. They are making sure that they're getting most value out of it or optimizing it. And then also being a bit more cautious on given the macroeconomic headwinds out there in the market.

    So, given those two things -- the point is, at some point, the optimizations will end. In fact, the money that they save in any optimization of any workload is what they into workloads. And those workloads will start ramping up. And so, one of the key things we are watching for, Brent, is to make sure that we are gaining share in this space through our value propositions and even build loyalty with our customers so that long term, we are well-positioned for share gains.

    So, that's sort of fundamentally how we view it. And then the other aspect I'd also say is simultaneously investing in this new AI trend because I don't think any application start that happens next is going to look like the application starts of 2019 or 2020. They're all going to have considerations around how is my AI inference performance, cost model is going to look like. And that's where we are well positioned again.

    So, that's how I view it. The market, you all are better readers of, quite frankly, what's happening out there. We can tell you what we see. What we see is optimization and some cautious approach to new workloads and that will cycle through, but we do fundamentally believe on a long-term basis, as a percentage of GDP, tech spend is going to go up.

    Thanks, Brent. Joe, next question, please.

    Our next question comes from the line of Mark Moerdler with Bernstein. Please proceed.

    Thank you very much. I'd like to follow up a little bit on this question relating to optimization. I know we saw some slowing this quarter. You're guiding to some slowing next quarter in Cloud and Azure.

    How much of that is -- do you believe at this point is truly people optimizing what they've already bought and stepping that before that versus how much of that is due to macro factors themselves specifically impacting demand?

    I'd say two things, and then, Amy, please feel free to add. One is, it absolutely is -- starts with workloads that they have at scale just because of the visibility one has on what's driving essentially the consumption meters. And there's real guidance that we ourselves in the product to say, here are the things that you do optimize your billing. And so that's sort of what is the fundamental thing.

    When we say do more with less and how can we help, that's sort of the first place customers go to. And then the next piece, really, I think, is going to be about how they take the optimization that they get and the savings they get workload and what new project starts. And that's where I think there's a reprioritization. When should we start the new projects? Those are the two things that are happening simultaneously.

    They don't perfectly match, but one of the things is they're looking to back some savings on some workloads and then start. So, that's where I think a little bit of what has to happen is the cycle time where the optimization cycle finishes, the projects start, and then the projects ramp. And I think that that's what at least on the cloud consumption side you're seeing. And on the per-user side, it's slightly different, which is in per-user also, there was real acceleration when it comes to purchases of per-user licenses, whether it is for knowledge workers or frontline workers.

    And again, they're all now making sure that they're all getting used and the usage is going up. Like when we look at our Office 365 usage, all those numbers are pretty up year over year in a substantial way. Like I gave you some of the Teams numbers. In fact, one of the things was, what will have Teams usage after the pandemic.

    Guess what? They're up. And so, those are the good news. And now once we cycle through that again, the seats will get added and premium, like I'm very, very excited about Teams Pro coming out in a couple of weeks. And those are all the things that people will be able to sort of use to ensure that the ARPUs are also going up a bit value.

    And, Mark, because I do think it's actually quite hard to separate from a driver perspective how much is optimization versus macro. It's all related when you start to say what's the best ROI I can get on every budget dollar I spend, and our job as a partner to so many of these customers is to help them do that. So, Satya has talked a bit about Azure. Let me talk a little bit about the per-user where the way it showed itself is we had very high renewal rates and very good suite performance at renewal, meaning what we tend to call internally recapture.

    While we had some more challenges on maybe a stand-alone sale of a new product where the cycle is going to be a little longer, right, and you're going to have to show that cost savings. But the suite sale, the value in that showed itself in terms of strong E5. You can see the ARPU growth, and you can see the consistency potentially in both renewal rate and in, frankly, the Microsoft 365 performance.

    Perfect. Thank you very much.

    Yeah. Thanks, Mark. Joe, next question, please.

    Our next question comes from the line of Kash Rangan with Goldman Sachs. Please proceed.

    Thank you very much. Satya, I'm curious if you could talk about how long the cycle time for optimization lasts. Are we talking a couple of quarters, few quarters, or multiple years? Because I do take your comment about tech spending as a percentage of global GDP going higher. So, if that were to happen, this -- how do you frame the duration of this optimization that's happening in the industry? Thank you so much.

    I mean, you know, I think that you can -- you have a workload, you optimize the workload, and you start a new workload. So, the thing that I would say is when you're done with optimizing a workload is when you are done with the cycle. So, I think if you sort of say, when did we enter this -- we accelerated workloads during the pandemic over a period of two years. So, we are optimizing.

    I don't think we're going to take two years to optimize, but we're going to take this year to optimize. And then as we optimize the new projects start and the new project starts don't start instantly at their peak usage. They start and then they scale. And so, those are the two cycles that will happen where there will be a time lag.

    Got it. So, it's a temporary adjustment before we start to get the full effect of the next set of workloads. Good to get that.

    That's correct. That's correct.

    Thanks, Kash. Joe, next question, please.

    The next question comes from the line of Karl Keirstead with UBS. Please proceed.

    Thank you. This one for Amy. Amy, given the obviously tough environment, it sounds like reaching that full fiscal year 20% constant-currency Commercial revs guide would be tough. Is that also true for the soft guidance for 10%-plus total revenue growth for the year? And if I could just sneak in a clarification, Amy, just because it's an important metric.

    When you talk about a four- to five-point decel in Azure, that's off of the 38% reported for December, right, not off the 35% exit rate? Thank you.

    It's all -- Karl, let me just -- the first half of your question, give me a second. On the second half of your question, which is the guide off the exit rate, it's off the exit rate on Azure of four to five points, just to make sure that is clear. In terms of thinking about total year revenue, right, I did not comment on full-year revenue as we continue, I think, really just to watch the Windows PC market as it returns to pre-pandemic levels. Outside of that, as you can see, the trends are relatively consistent.

    So, in some points, it's important because if you look at the operating income margin guidance that I talked about, the fact that we are guiding to really only one point of margin deceleration for the year on a constant-currency basis with probably over $2 billion of headwind from the OEM business from what we had anticipated heading into the year, the focus on margins, the focus on prioritization, the focus on putting our investments into where we know they have high return, I actually feel quite good about the place that puts us in as we exit the year in terms of -- and the right energy, right, or leaving the year in Q4 on leverage.

    Got it. Super helpful. Thanks, Amy.

    Thanks, Karl. Joe, next question, please.

    Our next question comes from the line of Brad Zelnick with Deutsche Bank. Please proceed.

    Great. Thanks very much. Amy, I wanted to ask about the expense actions that you announced last week. Obviously, not a decision that you would take lightly.

    How are you thinking about headcount for the remainder of the year and the possibility for further expense actions, if necessary? And what criteria do you consider in making these decisions? Thanks.

    Brad, listen, thanks for that question. Obviously, as we think about the Q4 guidance around low single-digit operating expense growth, we start to, as you know, sort of lap certain real acceleration points that we had last year. And we lapped the acquisitions both of Nuance and of Xandr. So, by the time that we get to the end of Q4, you'll see very moderated headcount growth on a year-over-year basis in addition to some the prioritization decisions we've made.

    And you're right. We take decisions like the one we had to make to get our cost structure more in line with revenue just incredibly seriously because we have lots of very talented people who were impacted by that. And so, I do think that we feel confident in that exit rate. As I said, it will certainly imply that year-over-year growth as we lap some of the investments that we've made will be quite small.

    Thanks for the color.

    Thanks, Brad. Joe, next question, please.

    Our next question comes from the line of Brad Reback with Stifel. Please proceed.

    Great. Thanks very much. On Office 365 Commercial, with you guys approaching 400 million seats and the E5 business really starting to accelerate here on that consolidated sort of expense ROI that you're putting forth, should we think about the growth there more evenly balanced between seats and ARPU going forward or still to continue to favor seats? Thanks.

    Yes. That's a good question, especially because this quarter, you started to see a little bit more of that ARPU influence. And as you might have gathered from your question and I'll just reinforce it, as we see some of this moderating seat growth, whether that's some of the new SKU weakness that we had talked about, some of the stand-alone stuff, you're starting to also see E5 ARPU happen at the same time. So, it does create some stability in that Office 365 Commercial revenue number.

    So, we're seeing still good seat growth, still growth across all workloads. And as you're pointing out, we're getting further into the E5 health, where we've seen, I want to say, four or five really good quarters of E5 adoption. The value there is just very high for customers in this environment between analytics, security, and I think we've given some, I think, good security data points in terms of adoption and voice. This is a place where customers can save money by moving to this suite.

    And I do think you're starting to see some of that ARPU help.

    And we're also investing in outside of Microsoft 365 in other per-user workloads. We were a new suite Power Platform on its own and even stand-alone offers like even Teams Pro and what have you. So, there's a significant amount of work we want to do besides sort of the suites that we all sort of have at scale.

    Great. Thank you very much.

    Joe, we have time for one last question.

    Our next question comes from the line of Tyler Radke with Citi. Please proceed.

    Yes. Thanks for taking the question. I wanted to ask just about how your visibility has changed in terms of some of the larger Azure customer ramps. Could you just comment on, to the extent those large customer ramps or if any of those projects are getting put on pause? And then is there any way to just kind of quantify the AI potential contribution or maybe GPU-powered contribution that Azure that you're expecting over the coming quarters? Thank you.

    On the second piece, I think it's too early to sort of start somehow separating out AI from the rest of the workload. I mean, even the workloads themselves, AI is just going to be a core part of a workload in Azure versus just AI alone. So, in other words, if you have an application that's using a bunch of inference, let's say, it's also going to have a bunch of storage, and it's going to have a bunch of other compute beyond GPU inferencing, if you will. So, I think over time, obviously, I think every app is going to be an AI app.

    Ladies and gentlemen, please stand by.

    That wraps up the Q&A portion of today's earnings call. Thank you for joining us today, and we look forward to speaking with all of you soon.

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  • Forspoken is out today on both PS5 where reviews came in yesterday and on PC which demands a pretty high performance machine to even meet its recommended specs where you re still only hitting 30 fps If we instead turn to the grand list of 2022 a 68 Metascore would put Forspoken outside the top 100 of games released on PS5 that year It would land somewhere around the 134 140 spot tied with the likes of Gotham Knights Goat Simulator 3 and Ghostbusters Sprits Unleashed That s out of 168 PS5 games released that year Again not good and with the way video games are scored a 68 aggregate is well below average in a given year It is possible fans feel differently I am reminded of another game that scored poorly with critics and had supposedly cringey dialogue High on Life which had a 67 Metascore but rocketed to the top of Xbox Game Pass and had an 8 1 10 audience score in contrast However I m not sure Forspoken has any inborn advantages here like a fanbase devoted to Rick and Morty style humor I would be surprised if there was some surge of fan support for the game to propel it to become a hit on PS5 and PC but I suppose it s too early to tell Actually it s not as bad as everyone s saying seems to be the main point of praise for it right now which is not especially promising I d previously cited Forspoken as one of the PS5 s three major console exclusives releasing this year alongside Final Fantasy XVI also from Square Enix and Spider Man 2 If Forspoken is a miss and as I predict may happen Spider Man 2 slips to 2024 that would leave this as a pretty barren year for PS5 with only FFXVI to rely on Given just how important Spider Man 2 itself is a holiday release date it actually hits could singlehandedly make PS5 s year but starting off with Forsaken reviewing this poorly is not great And this is one case where I don t think the new standard AAA game price of 70 and no day one PS Plus launches like Xbox does with Game Pass is doing the game any favors here While High on Life had well you might as well try it philosophy for Game Pass subscribers going for it Forspoken is an expensive commitment for PS5 players We ll see how it goes and if there s some swell of fan support post release here But my guess is we just don t see that this time around Follow me on Twitter YouTube Facebook and Instagram Subscribe to my free weekly content round up newsletter God Rolls Pick up my sci fi novels the Herokiller series and The Earthborn Trilogy Credit https www forbes com sites paultassi 2023 01 24 forspoken lands as the 5th best reviewed 2023 ps5 game out of five
    ‘Forspoken’ Lands As The 5th Best-Reviewed 2023 PS5 Game, Out Of Five
    Forspoken is out today on both PS5 where reviews came in yesterday and on PC which demands a pretty high performance machine to even meet its recommended specs where you re still only hitting 30 fps If we instead turn to the grand list of 2022 a 68 Metascore would put Forspoken outside the top 100 of games released on PS5 that year It would land somewhere around the 134 140 spot tied with the likes of Gotham Knights Goat Simulator 3 and Ghostbusters Sprits Unleashed That s out of 168 PS5 games released that year Again not good and with the way video games are scored a 68 aggregate is well below average in a given year It is possible fans feel differently I am reminded of another game that scored poorly with critics and had supposedly cringey dialogue High on Life which had a 67 Metascore but rocketed to the top of Xbox Game Pass and had an 8 1 10 audience score in contrast However I m not sure Forspoken has any inborn advantages here like a fanbase devoted to Rick and Morty style humor I would be surprised if there was some surge of fan support for the game to propel it to become a hit on PS5 and PC but I suppose it s too early to tell Actually it s not as bad as everyone s saying seems to be the main point of praise for it right now which is not especially promising I d previously cited Forspoken as one of the PS5 s three major console exclusives releasing this year alongside Final Fantasy XVI also from Square Enix and Spider Man 2 If Forspoken is a miss and as I predict may happen Spider Man 2 slips to 2024 that would leave this as a pretty barren year for PS5 with only FFXVI to rely on Given just how important Spider Man 2 itself is a holiday release date it actually hits could singlehandedly make PS5 s year but starting off with Forsaken reviewing this poorly is not great And this is one case where I don t think the new standard AAA game price of 70 and no day one PS Plus launches like Xbox does with Game Pass is doing the game any favors here While High on Life had well you might as well try it philosophy for Game Pass subscribers going for it Forspoken is an expensive commitment for PS5 players We ll see how it goes and if there s some swell of fan support post release here But my guess is we just don t see that this time around Follow me on Twitter YouTube Facebook and Instagram Subscribe to my free weekly content round up newsletter God Rolls Pick up my sci fi novels the Herokiller series and The Earthborn Trilogy Credit https www forbes com sites paultassi 2023 01 24 forspoken lands as the 5th best reviewed 2023 ps5 game out of five
    ‘Forspoken’ Lands As The 5th Best-Reviewed 2023 PS5 Game, Out Of Five
    General news6 days ago

    ‘Forspoken’ Lands As The 5th Best-Reviewed 2023 PS5 Game, Out Of Five

    Forspoken is out today on both PS5, where reviews came in yesterday, and on PC, which demands a pretty high performance machine to even meet its recommended specs, where you’re still only hitting 30 fps.

    If we instead turn to the grand list of 2022, a 68 Metascore would put Forspoken outside the top 100 of games released on PS5 that year. It would land somewhere around the 134-140 spot, tied with the likes of Gotham Knights, Goat Simulator 3 and Ghostbusters: Sprits Unleashed. That’s out of 168 PS5 games released that year. Again, not good, and with the way video games are scored, a 68 aggregate is well below average in a given year.

    It is possible fans feel differently. I am reminded of another game that scored poorly with critics and had supposedly cringey dialogue, High on Life, which had a 67 Metascore, but rocketed to the top of Xbox Game Pass and had an 8.1/10 audience score in contrast.

    However, I’m not sure Forspoken has any inborn advantages here like a fanbase devoted to Rick and Morty style humor. I would be surprised if there was some surge of fan support for the game to propel it to become a hit on PS5 and PC, but I suppose it’s too early to tell. “Actually, it’s not as bad as everyone’s saying” seems to be the main point of praise for it right now, which is not especially promising.

    I’d previously cited Forspoken as one of the PS5’s three major console exclusives releasing this year alongside Final Fantasy XVI, also from Square Enix, and Spider-Man 2. If Forspoken is a miss, and as I predict may happen, Spider-Man 2 slips to 2024, that would leave this as a pretty barren year for PS5 with only FFXVI to rely on. Given just how important Spider-Man 2 itself is, a holiday release date it actually hits could singlehandedly make PS5’s year, but starting off with Forsaken reviewing this poorly is not great. And this is one case where I don’t think the new “standard” AAA game price of $70 and no day one PS Plus launches like Xbox does with Game Pass is doing the game any favors here. While High on Life had “well, you might as well try it” philosophy for Game Pass subscribers going for it, Forspoken is an expensive commitment for PS5 players.

    We’ll see how it goes, and if there’s some swell of fan support post-release here. But my guess is we just don’t see that this time around.

    Follow me on Twitter, YouTube, Facebook and Instagram. Subscribe to my free weekly content round-up newsletter, God Rolls.

    Pick up my sci-fi novels the Herokiller series and The Earthborn Trilogy.

    Credit: https://www.forbes.com/sites/paultassi/2023/01/24/forspoken-lands-as-the-5th-best-reviewed-2023-ps5-game-out-of-five/

  • From Luminous Productions and Square Enix comes Forspoken a brand new action role playing game featuring Frey Holland a young female protagonist who finds herself in a race to free a fantastical world from a creeping blight that threatens humanity The game will be available for PlayStation 5 and PC We received a review copy for PS5 from Square Enix ahead of the game s January 24 launch date and have sunk more than 48 hours into gameplay so far Not sure if you want to add Forspoken to your game collection Then read on for our impressions of the game to help you decide Wondering where you can pre order Forspoken To help we ve compiled the following list of retailers If you want to play Forspoken on the PS5 but you do not already own one then find your console here at Amazon Forspoken is a brand new action role playing game featuring Frey Holland a young female protagonist trapped in the land of Athia who must use her newfound magical abilities to find her way home The game is full of likable characters but it also contains a distracting number of flaws Frey Holland a young New Yorker finds herself bonded to a chatty armband she names Cuff and is transported to Athia a world in desperate need of saving It seems that a corruption which Frey calls the Break has turned everything it touches into zombie versions of themselves Humans Birds Even goats and deer The last of humanity is confined to one city awaiting their terrible fate Thanks to Cuff Frey has the ability to use magic and for unknown reasons she s unaffected by the Break But as an orphan with an innate suspicion of anyone who isn t her cat will she hero up Or even want to There s no getting around it not even with magic parkour Forspoken is overshadowed and at times overwhelmed by its many flaws However if you can overlook its misfires you may actually enjoy your time in its spacious and desolate fantasy world Frey voiced by actress Ella Balinka is a 21 year old orphan with a rap sheet Her intellect takes a back seat to her attitude and she will tell you what she thinks punctuated by four letter New Yorkese Here s a shout out to Luminous Productions for giving us a woman of color as a protag someone who represents the ethnic diversity of the gamer demographic We enjoyed our time with her even as she made choices we would not Frey has one goal to get back home where the world isn t on the precipice of extinction The motive of her sidekick Cuff is more of a mystery But he s quick to provide guidance and even doles out tough love when needed Having him with us was like palling around J A R V I S voiced by Jonathan Cake Cuff sounds so close to Paul Bettany we think the game should be subtitled Wander Vision crossed with every American s idea of a British public school teacher Magic is Forspoken s standout system Pulling off a satisfying combination of moves including firing off chains of attacks and evasions as you think on your sneakered feet is like opening a can of magical whoop ass To give Frey her abilities you collect mana which are puffs of light that dot the landscape or are dropped by higher powered enemies Each mana is a point you can spend toward spells Ultimately you acquire entire sets of abilities each coming from a different source and based on a different element You can easily swap between your fire magic and your water magic between your many offensive and support spells This dynamic approach to combat is where Forspoken comes alive Reinforcing this is Forspoken s grade system Deft maneuvers such as attacking from the side or using attack magic while parkouring improve your grade from E up to A or the elusive Star The higher the grade the greater the loot the sooner you can rev up your gear Rather than the arbitrary per fight bonus objectives games like Spider Man or Gotham Knights you can choose your fighting style and still score well Yes you can select your powers based solely on an enemy s weakness which you can find by highlighting the enemy and pressing the Up button twice Or you can unleash your entire arsenal as we did Or you can unlock running boosts and avoid combat entirely thumbing your nose at zombies as you speed on by The choice is yours That said there is no choice to stealth there s not even a crouch button except for when approaching cats no really The combat is as straightforward as Frey herself After a stint in New York City the forested Jundoon and the city of Cipal we get to explore the open world On our first trek past the city gates we re met with a rugged moorland cradled by cliffs which provides Forspoken with a fabulous sense of scale Monuments fortresses guilds and villages in the distance piqued our curiosity and venturing off our path to inspect these structures led to more ruins as well as chests and zombies aplenty After two hours of exploration we realized we had forgotten our main quest entirely That s how we knew we were enjoying our time with Forspoken We became lost in the world Because of the Break there are no NPCs offering side quests or dialog outside of the city of Cipal It gives the world and its abandoned farms villages and towns a desolate vibe that can feel strangely freeing Since even the fauna is corrupted this also means that if it moves it s hostile except for cats again The world of Athia has long been ruled by wise goddess like women known as Tantas Side note tante means aunt in German and Yiddish But in recent years they have somehow gone mad and the world is being smothered under the Break Somehow the two are related And somehow only Frey can travel between the kingdoms of Athia without zombification How is Frey different Why are the Tantas destroying the world And how can Frey stop it On the face of it it s a meat and potatoes premise bad people are doing bad things good people are in jeopardy Yours Truly is the only hope But the mystery is presented well and we were intrigued enough to finish the game After we defeated the boss which took us 30 hours we were presented with some endgame content This encourages you to extend your time in Athia Fast travel Crafting stations Options to increase stats Dungeons known here as labyrinths Simple puzzles Loot loot and more loot Forspoken has everything you would want from an open world action game You may even like Forspoken better than other open world games because of the limited number of sidequests which are mostly found in the town Some may consider that a bug but we consider it a feature Kinda See No Replayability below compared to games where you can t move ten feet without someone tossing you a fetch quest Better yet Forspoken doesn t get bogged down with an overly complex crafting system and upgrades to our wearables are limited to just three items our capes necklaces and yes fingernail polish Higher level upgrades require rarer components that only the toughest bosses on the map will drop Be warned You won t be able to take them down initially until you ve upgraded your few stats You greet one character and the screen fades to black The character greets you back and the screen fades to black You ask the character about the state of the town and the screen fades to black We get it we really do Instead of stationary talking heads the characters actually move around This is Luminous Productions attempt at being cinematic But these innumerable fades to black destroy Luminous good intentions Forspoken has famously used the Luminous Engine which reduces loading time between scenes We re here to tell you that the scenes actually loaded faster than the pauses between sections of dialog What s more an icon that hovers over a character which lets you know that you can interact with them is not dismissed after your chat You may innocently click on a character expecting more dialogue and unintentionally repeat the same painful conversation To rub salt in this wound you can t skip whole cutscenes only lines of dialog Baffling and frustrating are two words you never want to read in a review but we stand by these adjectives Video games typically utilize the walk and talk a way of providing information as the player navigates the world around them Forspoken has no such mechanic When receiving large chunks of info typically from Cuff Frey is riveted in place There is no walk and talk There is only talk No other AAA title has forced us to stare at a screen the way Forspoken has Now picture their core demographic gamers who have trained themselves to react quickly to firehoses of moving images We predict rage quitting and quite a bit of that four letter New Yorkese Luckily most of these interactions take place in towns in the open world you re free from the ravages of conversation Considering that these problems the lack of character movement the fade to black disaster aren t found in any other game it s stupefying that Luminous Productions has created them The worst part of Forspoken is some of the earliest gameplay The whole opening section in New York could have been a cutscene and our first stop in Cipal is a tedious slog before we can properly start adventuring If you get past this to where Forspoken finally opens up spending time with it becomes worthwhile Further your magical abilities are constrained and you don t get to see the versatility of the magic system until you ve sunk a few hours into gameplay The NPCs non player characters of Forspoken are indistinct and the faces lack real nuance The looks and animation compare unfavorably with games made for the Playstation 3 That was in 2006 The zombies are cut from the same dull cloth That said they attack intelligently in a realistic way creeping up from behind or even climbing cliffs You can spot the tougher opponents based on their black and fire mottled exterior the same skin no matter what the enemy Luminous Productions may point to the Break as the reason for this We point back at Luminous Productions because we think it ran out of time to create distinct mini bosses Forspoken suffers from a whole lotta cut and paste Belfries and Pilgrim s Refugees i e fast travel points were more or less the same The dungeons weren t all carbon copies but it was close The same characters populated every zombie horde Even the cats a particularly adorable side quest look suspiciously similar Again this is a AAA title in 2023 We expect better The on the hoof dialog between Frey and Cuff which at least doesn t freeze you in place can be repetitive too which is a shame because there are some worthy sarcasm laden exchanges To put this in perspective one ends with Cuff saying Good then I won t need to tell you again Again and again The map isn t nearly as defined as we want it to be Navigation is hindered by a fog of war that makes it hard to see where you can travel to and how to approach it And sometimes you just can t get from there to here Compare this to Zelda Breath of the Wild whose map has landmarks and features that naturally pull your attention toward exploration Although having few sidequests and minimal stats gives us a straightforward game there is no reason to replay Forspoken It s only replayable if you like exploring for its own sake In our review of Gotham Knights PS5 we wrote Its engaging story is marred by issues that other games have solved for years At the risk of repeating ourselves this is even more true of Forspoken It s a shame because with the engaging characters explorable world and expansive combat options there s a lot to like here Forspoken is a game you should consider if you want an open world game without the bloat you want to play a game with a woman of color in the lead you prefer combat over dialog you don t favor stealth or have spare cash lying around Or if you like cats Even then there are better open world RPGs already out there ones worth their top dollars Consider playing God of War Ragnarok or Horizon Forbidden West or Elden Ring It took a few hours to warm up to Forspoken but we did Here s hoping that patches will fix the many problems that shouldn t have existed in the first place Note The prices above reflect the retailers listed price at the time of publication Receive product recommendations reviews amp deals several times a week Credit https www cnn com cnn underscored reviews forspoken
    Overshadowed by its many flaws
    From Luminous Productions and Square Enix comes Forspoken a brand new action role playing game featuring Frey Holland a young female protagonist who finds herself in a race to free a fantastical world from a creeping blight that threatens humanity The game will be available for PlayStation 5 and PC We received a review copy for PS5 from Square Enix ahead of the game s January 24 launch date and have sunk more than 48 hours into gameplay so far Not sure if you want to add Forspoken to your game collection Then read on for our impressions of the game to help you decide Wondering where you can pre order Forspoken To help we ve compiled the following list of retailers If you want to play Forspoken on the PS5 but you do not already own one then find your console here at Amazon Forspoken is a brand new action role playing game featuring Frey Holland a young female protagonist trapped in the land of Athia who must use her newfound magical abilities to find her way home The game is full of likable characters but it also contains a distracting number of flaws Frey Holland a young New Yorker finds herself bonded to a chatty armband she names Cuff and is transported to Athia a world in desperate need of saving It seems that a corruption which Frey calls the Break has turned everything it touches into zombie versions of themselves Humans Birds Even goats and deer The last of humanity is confined to one city awaiting their terrible fate Thanks to Cuff Frey has the ability to use magic and for unknown reasons she s unaffected by the Break But as an orphan with an innate suspicion of anyone who isn t her cat will she hero up Or even want to There s no getting around it not even with magic parkour Forspoken is overshadowed and at times overwhelmed by its many flaws However if you can overlook its misfires you may actually enjoy your time in its spacious and desolate fantasy world Frey voiced by actress Ella Balinka is a 21 year old orphan with a rap sheet Her intellect takes a back seat to her attitude and she will tell you what she thinks punctuated by four letter New Yorkese Here s a shout out to Luminous Productions for giving us a woman of color as a protag someone who represents the ethnic diversity of the gamer demographic We enjoyed our time with her even as she made choices we would not Frey has one goal to get back home where the world isn t on the precipice of extinction The motive of her sidekick Cuff is more of a mystery But he s quick to provide guidance and even doles out tough love when needed Having him with us was like palling around J A R V I S voiced by Jonathan Cake Cuff sounds so close to Paul Bettany we think the game should be subtitled Wander Vision crossed with every American s idea of a British public school teacher Magic is Forspoken s standout system Pulling off a satisfying combination of moves including firing off chains of attacks and evasions as you think on your sneakered feet is like opening a can of magical whoop ass To give Frey her abilities you collect mana which are puffs of light that dot the landscape or are dropped by higher powered enemies Each mana is a point you can spend toward spells Ultimately you acquire entire sets of abilities each coming from a different source and based on a different element You can easily swap between your fire magic and your water magic between your many offensive and support spells This dynamic approach to combat is where Forspoken comes alive Reinforcing this is Forspoken s grade system Deft maneuvers such as attacking from the side or using attack magic while parkouring improve your grade from E up to A or the elusive Star The higher the grade the greater the loot the sooner you can rev up your gear Rather than the arbitrary per fight bonus objectives games like Spider Man or Gotham Knights you can choose your fighting style and still score well Yes you can select your powers based solely on an enemy s weakness which you can find by highlighting the enemy and pressing the Up button twice Or you can unleash your entire arsenal as we did Or you can unlock running boosts and avoid combat entirely thumbing your nose at zombies as you speed on by The choice is yours That said there is no choice to stealth there s not even a crouch button except for when approaching cats no really The combat is as straightforward as Frey herself After a stint in New York City the forested Jundoon and the city of Cipal we get to explore the open world On our first trek past the city gates we re met with a rugged moorland cradled by cliffs which provides Forspoken with a fabulous sense of scale Monuments fortresses guilds and villages in the distance piqued our curiosity and venturing off our path to inspect these structures led to more ruins as well as chests and zombies aplenty After two hours of exploration we realized we had forgotten our main quest entirely That s how we knew we were enjoying our time with Forspoken We became lost in the world Because of the Break there are no NPCs offering side quests or dialog outside of the city of Cipal It gives the world and its abandoned farms villages and towns a desolate vibe that can feel strangely freeing Since even the fauna is corrupted this also means that if it moves it s hostile except for cats again The world of Athia has long been ruled by wise goddess like women known as Tantas Side note tante means aunt in German and Yiddish But in recent years they have somehow gone mad and the world is being smothered under the Break Somehow the two are related And somehow only Frey can travel between the kingdoms of Athia without zombification How is Frey different Why are the Tantas destroying the world And how can Frey stop it On the face of it it s a meat and potatoes premise bad people are doing bad things good people are in jeopardy Yours Truly is the only hope But the mystery is presented well and we were intrigued enough to finish the game After we defeated the boss which took us 30 hours we were presented with some endgame content This encourages you to extend your time in Athia Fast travel Crafting stations Options to increase stats Dungeons known here as labyrinths Simple puzzles Loot loot and more loot Forspoken has everything you would want from an open world action game You may even like Forspoken better than other open world games because of the limited number of sidequests which are mostly found in the town Some may consider that a bug but we consider it a feature Kinda See No Replayability below compared to games where you can t move ten feet without someone tossing you a fetch quest Better yet Forspoken doesn t get bogged down with an overly complex crafting system and upgrades to our wearables are limited to just three items our capes necklaces and yes fingernail polish Higher level upgrades require rarer components that only the toughest bosses on the map will drop Be warned You won t be able to take them down initially until you ve upgraded your few stats You greet one character and the screen fades to black The character greets you back and the screen fades to black You ask the character about the state of the town and the screen fades to black We get it we really do Instead of stationary talking heads the characters actually move around This is Luminous Productions attempt at being cinematic But these innumerable fades to black destroy Luminous good intentions Forspoken has famously used the Luminous Engine which reduces loading time between scenes We re here to tell you that the scenes actually loaded faster than the pauses between sections of dialog What s more an icon that hovers over a character which lets you know that you can interact with them is not dismissed after your chat You may innocently click on a character expecting more dialogue and unintentionally repeat the same painful conversation To rub salt in this wound you can t skip whole cutscenes only lines of dialog Baffling and frustrating are two words you never want to read in a review but we stand by these adjectives Video games typically utilize the walk and talk a way of providing information as the player navigates the world around them Forspoken has no such mechanic When receiving large chunks of info typically from Cuff Frey is riveted in place There is no walk and talk There is only talk No other AAA title has forced us to stare at a screen the way Forspoken has Now picture their core demographic gamers who have trained themselves to react quickly to firehoses of moving images We predict rage quitting and quite a bit of that four letter New Yorkese Luckily most of these interactions take place in towns in the open world you re free from the ravages of conversation Considering that these problems the lack of character movement the fade to black disaster aren t found in any other game it s stupefying that Luminous Productions has created them The worst part of Forspoken is some of the earliest gameplay The whole opening section in New York could have been a cutscene and our first stop in Cipal is a tedious slog before we can properly start adventuring If you get past this to where Forspoken finally opens up spending time with it becomes worthwhile Further your magical abilities are constrained and you don t get to see the versatility of the magic system until you ve sunk a few hours into gameplay The NPCs non player characters of Forspoken are indistinct and the faces lack real nuance The looks and animation compare unfavorably with games made for the Playstation 3 That was in 2006 The zombies are cut from the same dull cloth That said they attack intelligently in a realistic way creeping up from behind or even climbing cliffs You can spot the tougher opponents based on their black and fire mottled exterior the same skin no matter what the enemy Luminous Productions may point to the Break as the reason for this We point back at Luminous Productions because we think it ran out of time to create distinct mini bosses Forspoken suffers from a whole lotta cut and paste Belfries and Pilgrim s Refugees i e fast travel points were more or less the same The dungeons weren t all carbon copies but it was close The same characters populated every zombie horde Even the cats a particularly adorable side quest look suspiciously similar Again this is a AAA title in 2023 We expect better The on the hoof dialog between Frey and Cuff which at least doesn t freeze you in place can be repetitive too which is a shame because there are some worthy sarcasm laden exchanges To put this in perspective one ends with Cuff saying Good then I won t need to tell you again Again and again The map isn t nearly as defined as we want it to be Navigation is hindered by a fog of war that makes it hard to see where you can travel to and how to approach it And sometimes you just can t get from there to here Compare this to Zelda Breath of the Wild whose map has landmarks and features that naturally pull your attention toward exploration Although having few sidequests and minimal stats gives us a straightforward game there is no reason to replay Forspoken It s only replayable if you like exploring for its own sake In our review of Gotham Knights PS5 we wrote Its engaging story is marred by issues that other games have solved for years At the risk of repeating ourselves this is even more true of Forspoken It s a shame because with the engaging characters explorable world and expansive combat options there s a lot to like here Forspoken is a game you should consider if you want an open world game without the bloat you want to play a game with a woman of color in the lead you prefer combat over dialog you don t favor stealth or have spare cash lying around Or if you like cats Even then there are better open world RPGs already out there ones worth their top dollars Consider playing God of War Ragnarok or Horizon Forbidden West or Elden Ring It took a few hours to warm up to Forspoken but we did Here s hoping that patches will fix the many problems that shouldn t have existed in the first place Note The prices above reflect the retailers listed price at the time of publication Receive product recommendations reviews amp deals several times a week Credit https www cnn com cnn underscored reviews forspoken
    Overshadowed by its many flaws
    General news7 days ago

    Overshadowed by its many flaws

    From Luminous Productions and Square Enix comes Forspoken, a brand-new, action role-playing game featuring Frey Holland, a young female protagonist who finds herself in a race to free a fantastical world from a creeping blight that threatens humanity.

    The game will be available for PlayStation 5 and PC. We received a review copy for PS5 from Square Enix ahead of the game’s January 24 launch date, and have sunk more than 48 hours into gameplay so far.

    Not sure if you want to add Forspoken to your game collection? Then read on for our impressions of the game to help you decide.

    Wondering where you can pre-order Forspoken? To help, we’ve compiled the following list of retailers.

    If you want to play Forspoken on the PS5 but you do not already own one, then find your console here at Amazon.

    Forspoken is a brand-new, action role-playing game featuring Frey Holland, a young female protagonist trapped in the land of Athia, who must use her newfound magical abilities to find her way home. The game is full of likable characters, but it also contains a distracting number of flaws.

    Frey Holland, a young New Yorker, finds herself bonded to a chatty armband she names “Cuff” and is transported to Athia, a world in desperate need of saving. It seems that a corruption — which Frey calls “the Break” — has turned everything it touches into zombie versions of themselves: Humans. Birds. Even goats and deer. The last of humanity is confined to one city, awaiting their terrible fate.

    Thanks to Cuff, Frey has the ability to use magic and, for unknown reasons, she’s unaffected by the Break. But as an orphan with an innate suspicion of anyone who isn’t her cat, will she hero up? Or even want to?

    There’s no getting around it, not even with magic parkour: Forspoken is overshadowed  — and, at times, overwhelmed — by its many flaws. However, if you can overlook its misfires, you may actually enjoy your time in its spacious and desolate fantasy world.

    Frey (voiced by actress Ella Balinka) is a 21-year-old orphan with a rap sheet. Her intellect takes a back seat to her attitude, and she will tell you what she thinks, punctuated by four-letter New Yorkese. Here’s a shout-out to Luminous Productions for giving us a woman of color as a protag, someone who represents the ethnic diversity of the gamer demographic. We enjoyed our time with her, even as she made choices we would not.

    Frey has one goal: to get back home, where the world isn’t on the precipice of extinction. The motive of her sidekick Cuff is more of a mystery. But he’s quick to provide guidance and even doles out tough love when needed. Having him with us was like palling around J.A.R.V.I.S (voiced by Jonathan Cake, Cuff sounds so close to Paul Bettany, we think the game should be subtitled “Wander Vision.”) crossed with every American’s idea of a British public school teacher.

    Magic is Forspoken’s standout system. Pulling off a satisfying combination of moves, including firing off chains of attacks and evasions as you think on your sneakered feet, is like opening a can of magical whoop-ass.

    To give Frey her abilities, you collect mana, which are puffs of light that dot the landscape or are dropped by higher-powered enemies. Each mana is a point you can spend toward spells. Ultimately, you acquire entire sets of abilities, each coming from a different source and based on a different element. You can easily swap between your fire magic and your water magic, between your many offensive and support spells. This dynamic approach to combat is where Forspoken comes alive.

    Reinforcing this is Forspoken’s “grade” system. Deft maneuvers, such as attacking from the side or using attack magic while parkouring, improve your grade, from E up to A (or the elusive Star). The higher the grade, the greater the loot, the sooner you can rev up your gear. Rather than the arbitrary per-fight bonus objectives games (like Spider-Man or Gotham Knights), you can choose your fighting style and still score well.

    Yes, you can select your powers based solely on an enemy’s weakness (which you can find by highlighting the enemy and pressing the Up button twice). Or you can unleash your entire arsenal, as we did. Or you can unlock running boosts and avoid combat entirely, thumbing your nose at zombies as you speed on by. The choice is yours.

    That said, there is no choice to stealth; there’s not even a crouch button (except for when approaching cats — no, really). The combat is as straightforward as Frey herself.

    After a stint in New York City, the forested Jundoon and the city of Cipal, we get to explore the open world. On our first trek past the city gates, we’re met with a rugged moorland, cradled by cliffs, which provides Forspoken with a fabulous sense of scale. Monuments, fortresses, guilds and villages in the distance piqued our curiosity, and venturing off our path to inspect these structures led to more ruins, as well as chests and zombies aplenty.

    After two hours of exploration, we realized we had forgotten our main quest entirely. That’s how we knew we were enjoying our time with Forspoken: We became lost in the world.

    Because of the Break, there are no NPCs offering side quests or dialog outside of the city of Cipal. It gives the world and its abandoned farms villages and towns a desolate vibe that can feel strangely freeing. Since even the fauna is corrupted, this also means that if it moves, it’s hostile (except for cats, again).

    The world of Athia has long been ruled by wise goddess-like women, known as Tantas. (Side note: “tante” means “aunt” in German and Yiddish.) But in recent years, they have somehow gone mad, and the world is being smothered under the Break. Somehow, the two are related. And somehow, only Frey can travel between the kingdoms of Athia without zombification.

    How is Frey different? Why are the Tantas destroying the world? And how can Frey stop it?

    On the face of it, it’s a meat-and-potatoes premise–bad people are doing bad things, good people are in jeopardy, Yours Truly is the only hope(™). But the mystery is presented well, and we were intrigued enough to finish the game.

    After we defeated the boss (which took us 30 hours), we were presented with some endgame content. This encourages you to extend your time in Athia.

    Fast travel. Crafting stations. Options to increase stats. Dungeons, known here as labyrinths. Simple puzzles. Loot, loot and more loot. Forspoken has everything you would want from an open-world action game. You may even like Forspoken better than other open-world games, because of the limited number of sidequests, which are mostly found in the town. Some may consider that a bug, but we consider it a feature (Kinda. See “No Replayability,” below) compared to games where you can’t move ten feet without someone tossing you a fetch quest.

    Better yet, Forspoken doesn’t get bogged down with an overly complex crafting system, and upgrades to our wearables are limited to just three items: our capes, necklaces and, yes, fingernail polish. Higher-level upgrades require rarer components that only the toughest bosses on the map will drop. Be warned. You won’t be able to take them down initially until you’ve upgraded your few stats.

    • You greet one character, and the screen fades to black. • The character greets you back, and the screen fades to black. • You ask the character about the state of the town, and the screen fades to black.

    We get it, we really do: Instead of stationary talking heads, the characters actually move around. This is Luminous Productions’ attempt at being cinematic. But these innumerable fades to black destroy Luminous’ good intentions.

    Forspoken has famously used the Luminous Engine, which reduces loading time between scenes. We’re here to tell you that the scenes actually loaded faster than the pauses between sections of dialog.

    What’s more, an icon that hovers over a character – which lets you know that you can interact with them – is not dismissed after your chat. You may innocently click on a character expecting more dialogue… and unintentionally repeat the same painful conversation. To rub salt in this wound, you can’t skip whole cutscenes, only lines of dialog. “Baffling” and “frustrating” are two words you never want to read in a review, but we stand by these adjectives.

    Video games typically utilize the “walk and talk,” a way of providing information as the player navigates the world around them. Forspoken has no such mechanic. When receiving large chunks of info, typically from Cuff, Frey is riveted in place. There is no walk and talk. There is only talk.

    No other AAA title has forced us to stare at a screen the way Forspoken has. Now picture their core demographic: gamers who have trained themselves to react quickly to firehoses of moving images. We predict rage-quitting and quite a bit of that four-letter New Yorkese. Luckily, most of these interactions take place in towns; in the open world, you’re free from the ravages of conversation.

    Considering that these problems – the lack of character movement, the fade-to-black disaster – aren’t found in any other game, it’s stupefying that Luminous Productions has created them.

    The worst part of Forspoken is some of the earliest gameplay. The whole opening section in New York could have been a cutscene, and our first stop in Cipal is a tedious slog before we can properly start adventuring.  If you get past this to where Forspoken finally opens up, spending time with it becomes worthwhile.

    Further, your magical abilities are constrained, and you don’t get to see the versatility of the magic system until you’ve sunk a few hours into gameplay.

    The NPCs (non-player characters) of Forspoken are indistinct, and the faces lack real nuance. The looks and animation compare, unfavorably, with games made for the Playstation 3. That was in 2006.

    The zombies are cut from the same dull cloth. That said, they attack intelligently, in a realistic way, creeping up from behind or even climbing cliffs.

    You can spot the tougher opponents based on their black-and-fire mottled-exterior–the same skin, no matter what the enemy. Luminous Productions may point to the Break as the reason for this. We point back at Luminous Productions, because we think it ran out of time to create distinct mini-bosses.

    Forspoken suffers from a whole lotta cut and paste. Belfries and Pilgrim’s Refugees (i.e., fast-travel points) were more or less the same. The dungeons weren’t all carbon copies, but it was close. The same characters populated every zombie horde. Even the cats–a particularly adorable side quest — look suspiciously similar. Again, this is a AAA title in 2023. We expect better.

    The on-the-hoof dialog between Frey and Cuff (which at least doesn’t freeze you in place) can be repetitive too, which is a shame, because there are some worthy sarcasm-laden exchanges. To put this in perspective, one ends with Cuff saying “Good, then I won’t need to tell you again.” Again and again.

    The map isn’t nearly as defined as we want it to be. Navigation is hindered by a fog of war that makes it hard to see where you can travel to and how to approach it. And sometimes, you just can’t get from there to here. Compare this to Zelda: Breath of the Wild, whose map has landmarks and features that naturally pull your attention toward exploration.

    Although having few sidequests and minimal stats gives us a straightforward game, there is no reason to replay Forspoken. It’s only replayable if you like exploring for its own sake.

    In our review of Gotham Knights (PS5), we wrote, “Its engaging story is marred by issues that other games have solved for years.” At the risk of repeating ourselves, this is even more true of Forspoken. It’s a shame because, with the engaging characters, explorable world and expansive combat options, there’s a lot to like here.

    Forspoken is a game you should consider if you want an open-world game without the bloat, you want to play a game with a woman of color in the lead, you prefer combat over dialog, you don’t favor stealth or have spare cash lying around. Or if you like cats.

    Even then, there are better open-world RPGs already out there, ones worth their top dollars. Consider playing God of War Ragnarok or Horizon Forbidden West or Elden Ring.

    It took a few hours to warm up to Forspoken, but we did. Here’s hoping that patches will fix the many problems that shouldn’t have existed in the first place.

    Note: The prices above reflect the retailers' listed price at the time of publication.

    Receive product recommendations, reviews & deals several times a week.

    Credit: https://www.cnn.com/cnn-underscored/reviews/forspoken

  • Things you buy through our links may earn New York a commission The Last of Us takes its time revving up The HBO video game adaptation opens on a 1960s TV interview program hosted by Bighead featuring two epidemiologists discussing the possible end of humanity via disease John Hannah plays the more portentous of the duo laying out the mechanics of what will eventually drive the apocalypse in this universe mind controlling fungus previously a phenomenon contained to the insect world pushed by climate change to evolve such that it makes the jump into human beings As he speaks of how the infection would ravage billions the camera repeatedly cuts to the audience faces blank heightened a mass The scene is brief but the tone is set That opening scene is specific to the TV show and it immediately forecasts an intent to move this story at its own pace As someone long familiar with the source material the choice is exciting the HBO version places a premium on leaving room to breathe The narrative patiently settles into a pre apocalypse world introducing Pedro Pascal s Joel Miller his daughter Sarah Nico Parker and his younger brother Tommy Gabriel Luna on Joel s birthday as Sarah embarks on a quest to get his old watch fixed You get the drift of Joel s situation fairly briskly single parent tight relationship with Sarah she s a good kid It ll be another ten minutes of show before shit hits the fan and when it does you re fully baked into their family and the effect of catastrophic implosion and chaos hits more clearly and holistically This wasn t necessarily the case in the source material The original video game arrived in 2013 a moment when big budget AAA studios were deep into a yearslong effort to aesthetically replicate a sense of cinematic spectacle In many ways this ran parallel to a similar movement in television The Walking Dead had premiered three years before and HBO s own Game of Thrones followed a year after that Indeed what made the original Last of Us particularly interesting was how it seemed to emulate prestige television more than anything else Besides its visual realism there was an episodic nature to the grim heady story which usually takes around 15 hours of gameplay to complete However back in 2013 the game was still doing its best with the tools it had within the context of its medium Its opening sequence had to do more economical narrative work in order to get you into play as soon as possible opening just hours before the outbreak with a scene that also appears in the show albeit 15 minutes in in which Sarah gifts Joel that watch for his birthday This cut scene does some expository labor but the work of grounding you in the world chiefly happens through environmental storytelling which is something that isn t entirely possible with television or movies Though one could possibly argue Alfonso Cuar n s Children of Men which does a ton of world building through background elements that the camera often glides by came quite close The very first character you control is Sarah whom you guide through a splendid sequence that evokes the feeling of being a child alone at home Details like soccer trophies or a weirdly placed Stairmaster around the house communicate to you the player the circumstances of their lives but it s dark Joel isn t around and the world is ending The game and the HBO show converge when the three Millers get into the car For those with a strong attachment to the original work the last decade was essentially building up to this moment and what transpires in the TV adaptation is something close to a shot for shot remake The camera assumes a view from the back seat mimicking Sarah s perspective as the family tries to get out of Dodge In the game you control where Sarah is looking meaning you can miss whole images like their neighbor s burning home or an overrun hospital Many lines from the game are preserved They have a kid Joel So do we while distinct tweaks have been made to further enhance the onscreen drama The plane crash for example is an invention for the show in the video game Sarah and Joel are knocked out when another car slams into theirs The HBO remake of the outbreak sequence is striking in how it fully realizes what the original work was simulating Playing the game you can feel The Last of Us strain to use its elemental tools to achieve the kind of cinematic storytelling it s going for even as it s ultimately successful While you control Joel navigating the chaotic streets Sarah in tow it s not uncommon to spot the seams of the technology of the time Tommy s pathfinding blocking you in strange ways the artificially intelligent crowd not quite swarming in a manner that tracks organically The remake with more modern tech released last fall is only somewhat better Since this is a game it s also a sequence with a fail state If you don t run fast enough Joel gets bitten the screen blacks out and you have to begin again This cultivates a sense of urgency in the player but it opens up the possibility of some meaningful cost to the narrative momentum Such a trade off is endemic to video games It s really something to see a prestige TV show literally translate a scene from a game that was in its own way already emulating a prestige TV show The promise of an adaptation and this adaptation in particular is the possibility of expansion to more deeply explore or perhaps even subvert the narrative themes of the widely beloved story that powered this wildly successful video game It s a dramatic act of imagining taking an original text and finding new life But as the first half of HBO s spectacular pilot episode shows you still gotta play the hits Things you buy through our links may earn New York a commission This site is protected by reCAPTCHA and the Google Privacy Policy andAs part of your account you ll receive occasional updates and offers from New York which you can opt out of anytime As part of your account you ll receive occasional updates and offers from New York which you can opt out of anytime This site is protected by reCAPTCHA and the Google Privacy Policy andAs part of your account you ll receive occasional updates and offers from New York which you can opt out of anytime As part of your account you ll receive occasional updates and offers from New York which you can opt out of anytime This site is protected by reCAPTCHA and the Google Privacy Policy andAs part of your account you ll receive occasional updates and offers from New York which you can opt out of anytime As part of your account you ll receive occasional updates and offers from New York which you can opt out of anytime Source Credit https www vulture com article the last of us opening game show comparison html
    The Last of Us Levels Up Its Opening
    Things you buy through our links may earn New York a commission The Last of Us takes its time revving up The HBO video game adaptation opens on a 1960s TV interview program hosted by Bighead featuring two epidemiologists discussing the possible end of humanity via disease John Hannah plays the more portentous of the duo laying out the mechanics of what will eventually drive the apocalypse in this universe mind controlling fungus previously a phenomenon contained to the insect world pushed by climate change to evolve such that it makes the jump into human beings As he speaks of how the infection would ravage billions the camera repeatedly cuts to the audience faces blank heightened a mass The scene is brief but the tone is set That opening scene is specific to the TV show and it immediately forecasts an intent to move this story at its own pace As someone long familiar with the source material the choice is exciting the HBO version places a premium on leaving room to breathe The narrative patiently settles into a pre apocalypse world introducing Pedro Pascal s Joel Miller his daughter Sarah Nico Parker and his younger brother Tommy Gabriel Luna on Joel s birthday as Sarah embarks on a quest to get his old watch fixed You get the drift of Joel s situation fairly briskly single parent tight relationship with Sarah she s a good kid It ll be another ten minutes of show before shit hits the fan and when it does you re fully baked into their family and the effect of catastrophic implosion and chaos hits more clearly and holistically This wasn t necessarily the case in the source material The original video game arrived in 2013 a moment when big budget AAA studios were deep into a yearslong effort to aesthetically replicate a sense of cinematic spectacle In many ways this ran parallel to a similar movement in television The Walking Dead had premiered three years before and HBO s own Game of Thrones followed a year after that Indeed what made the original Last of Us particularly interesting was how it seemed to emulate prestige television more than anything else Besides its visual realism there was an episodic nature to the grim heady story which usually takes around 15 hours of gameplay to complete However back in 2013 the game was still doing its best with the tools it had within the context of its medium Its opening sequence had to do more economical narrative work in order to get you into play as soon as possible opening just hours before the outbreak with a scene that also appears in the show albeit 15 minutes in in which Sarah gifts Joel that watch for his birthday This cut scene does some expository labor but the work of grounding you in the world chiefly happens through environmental storytelling which is something that isn t entirely possible with television or movies Though one could possibly argue Alfonso Cuar n s Children of Men which does a ton of world building through background elements that the camera often glides by came quite close The very first character you control is Sarah whom you guide through a splendid sequence that evokes the feeling of being a child alone at home Details like soccer trophies or a weirdly placed Stairmaster around the house communicate to you the player the circumstances of their lives but it s dark Joel isn t around and the world is ending The game and the HBO show converge when the three Millers get into the car For those with a strong attachment to the original work the last decade was essentially building up to this moment and what transpires in the TV adaptation is something close to a shot for shot remake The camera assumes a view from the back seat mimicking Sarah s perspective as the family tries to get out of Dodge In the game you control where Sarah is looking meaning you can miss whole images like their neighbor s burning home or an overrun hospital Many lines from the game are preserved They have a kid Joel So do we while distinct tweaks have been made to further enhance the onscreen drama The plane crash for example is an invention for the show in the video game Sarah and Joel are knocked out when another car slams into theirs The HBO remake of the outbreak sequence is striking in how it fully realizes what the original work was simulating Playing the game you can feel The Last of Us strain to use its elemental tools to achieve the kind of cinematic storytelling it s going for even as it s ultimately successful While you control Joel navigating the chaotic streets Sarah in tow it s not uncommon to spot the seams of the technology of the time Tommy s pathfinding blocking you in strange ways the artificially intelligent crowd not quite swarming in a manner that tracks organically The remake with more modern tech released last fall is only somewhat better Since this is a game it s also a sequence with a fail state If you don t run fast enough Joel gets bitten the screen blacks out and you have to begin again This cultivates a sense of urgency in the player but it opens up the possibility of some meaningful cost to the narrative momentum Such a trade off is endemic to video games It s really something to see a prestige TV show literally translate a scene from a game that was in its own way already emulating a prestige TV show The promise of an adaptation and this adaptation in particular is the possibility of expansion to more deeply explore or perhaps even subvert the narrative themes of the widely beloved story that powered this wildly successful video game It s a dramatic act of imagining taking an original text and finding new life But as the first half of HBO s spectacular pilot episode shows you still gotta play the hits Things you buy through our links may earn New York a commission This site is protected by reCAPTCHA and the Google Privacy Policy andAs part of your account you ll receive occasional updates and offers from New York which you can opt out of anytime As part of your account you ll receive occasional updates and offers from New York which you can opt out of anytime This site is protected by reCAPTCHA and the Google Privacy Policy andAs part of your account you ll receive occasional updates and offers from New York which you can opt out of anytime As part of your account you ll receive occasional updates and offers from New York which you can opt out of anytime This site is protected by reCAPTCHA and the Google Privacy Policy andAs part of your account you ll receive occasional updates and offers from New York which you can opt out of anytime As part of your account you ll receive occasional updates and offers from New York which you can opt out of anytime Source Credit https www vulture com article the last of us opening game show comparison html
    The Last of Us Levels Up Its Opening
    General news2 weeks ago

    The Last of Us Levels Up Its Opening

    Things you buy through our links may earn New York a commission.

    The Last of Us takes its time revving up. The HBO video-game adaptation opens on a 1960s TV interview program (hosted by Bighead!) featuring two epidemiologists discussing the possible end of humanity via disease. John Hannah plays the more portentous of the duo, laying out the mechanics of what will eventually drive the apocalypse in this universe: mind-controlling fungus, previously a phenomenon contained to the insect world, pushed by climate change to evolve such that it makes the jump into human beings. As he speaks of how the infection would ravage billions, the camera repeatedly cuts to the audience; faces blank, heightened, a mass. The scene is brief, but the tone is set.

    That opening scene is specific to the TV show, and it immediately forecasts an intent to move this story at its own pace. As someone long familiar with the source material, the choice is exciting: the HBO version places a premium on leaving room to breathe. The narrative patiently settles into a pre-apocalypse world, introducing Pedro Pascal’s Joel Miller, his daughter Sarah (Nico Parker), and his younger brother Tommy (Gabriel Luna) on Joel’s birthday, as Sarah embarks on a quest to get his old watch fixed. You get the drift of Joel’s situation fairly briskly: single parent, tight relationship with Sarah, she’s a good kid. It’ll be another ten minutes of show before shit hits the fan, and when it does, you’re fully baked into their family and the effect of catastrophic implosion and chaos hits more clearly and holistically.

    This wasn’t necessarily the case in the source material. The original video game arrived in 2013, a moment when big-budget AAA studios were deep into a yearslong effort to aesthetically replicate a sense of cinematic spectacle. In many ways, this ran parallel to a similar movement in television; The Walking Dead had premiered three years before, and HBO’s own Game of Thrones followed a year after that. Indeed, what made the original Last of Us particularly interesting was how it seemed to emulate prestige television more than anything else: Besides its visual realism, there was an episodic nature to the grim, heady story, which usually takes around 15 hours of gameplay to complete.

    However, back in 2013, the game was still doing its best with the tools it had within the context of its medium. Its opening sequence had to do more economical narrative work in order to get you into play as soon as possible, opening just hours before the outbreak with a scene that also appears in the show — albeit 15 minutes in — in which Sarah gifts Joel that watch for his birthday. This cut scene does some expository labor, but the work of grounding you in the world chiefly happens through environmental storytelling, which is something that isn’t entirely possible with television or movies. (Though one could possibly argue Alfonso Cuarón’s Children of Men, which does a ton of world-building through background elements that the camera often glides by, came quite close.) The very first character you control is Sarah, whom you guide through a splendid sequence that evokes the feeling of being a child alone at home. Details like soccer trophies or a weirdly placed Stairmaster around the house communicate to you, the player, the circumstances of their lives — but it’s dark, Joel isn’t around, and the world is ending.

    The game and the HBO show converge when the three Millers get into the car. For those with a strong attachment to the original work, the last decade was essentially building up to this moment, and what transpires in the TV adaptation is something close to a shot-for-shot remake. The camera assumes a view from the back seat, mimicking Sarah’s perspective as the family tries to get out of Dodge. (In the game, you control where Sarah is looking, meaning you can miss whole images like their neighbor’s burning home or an overrun hospital.) Many lines from the game are preserved (“They have a kid, Joel. “So do we.), while distinct tweaks have been made to further enhance the onscreen drama. The plane crash, for example, is an invention for the show; in the video game, Sarah and Joel are knocked out when another car slams into theirs.

    The HBO remake of the outbreak sequence is striking in how it fully realizes what the original work was simulating. Playing the game, you can feel The Last of Us strain to use its elemental tools to achieve the kind of cinematic storytelling it’s going for, even as it’s ultimately successful. While you control Joel navigating the chaotic streets, Sarah in tow, it’s not uncommon to spot the seams of the technology of the time: Tommy’s pathfinding blocking you in strange ways, the artificially intelligent crowd not quite swarming in a manner that tracks organically. (The remake with more modern tech, released last fall, is only somewhat better.) Since this is a game, it’s also a sequence with a fail state. If you don’t run fast enough, Joel gets bitten, the screen blacks out, and you have to begin again. This cultivates a sense of urgency in the player, but it opens up the possibility of some meaningful cost to the narrative momentum. Such a trade-off is endemic to video games.

    It’s really something to see a prestige TV show literally translate a scene from a game that was, in its own way, already emulating a prestige TV show. The promise of an adaptation — and this adaptation in particular — is the possibility of expansion: to more deeply explore, or perhaps even subvert, the narrative themes of the widely beloved story that powered this wildly successful video game. It’s a dramatic act of imagining, taking an original text and finding new life. But as the first half of HBO’s spectacular pilot episode shows, you still gotta play the hits.

    Things you buy through our links may earn New York a commission.

    This site is protected by reCAPTCHA and the Google Privacy Policy and

    As part of your account, you’ll receive occasional updates and offers from New York, which you can opt out of anytime.

    As part of your account, you’ll receive occasional updates and offers from New York, which you can opt out of anytime.

    This site is protected by reCAPTCHA and the Google Privacy Policy and

    As part of your account, you’ll receive occasional updates and offers from New York, which you can opt out of anytime.

    As part of your account, you’ll receive occasional updates and offers from New York, which you can opt out of anytime.

    This site is protected by reCAPTCHA and the Google Privacy Policy and

    As part of your account, you’ll receive occasional updates and offers from New York, which you can opt out of anytime.

    As part of your account, you’ll receive occasional updates and offers from New York, which you can opt out of anytime.

    Source Credit: https://www.vulture.com/article/the-last-of-us-opening-game-show-comparison.html

  • Cautions motorists against driving vehicles loaded with petroleum productsOfficials of Lagos State Traffic Management Authority LASTMA yesterday handed over two members of a one chance robbery gang to Ilasan Police Station Lagos The suspects were nabbed yesterday at Ikate Lekki Ajah area of Lagos Director Public Affairs Department LASTMA Adebayo Taofiq who disclosed this in a statement said patrol team of the agency arrested the suspects while on duty monitoring and controlling traffic around the Lekki Ajah area of the state According to the spokesperson Our officials while on traffic patrol heard passengers with loud voices shouting at the thieves inside an unpainted T4 commercial bus AAA 750 XX While trying to stop the driver he drove dangerously and our men pursued them with a LASTMA patrol vehicle to Ikate where they were blocked by another pathfinder car belonging to a good Samaritan Taofik confirmed that while two suspects were arrested two escaped with the Point of Sales PoS machine which they used to withdraw passengers money inside the commercial bus The two suspects with the recovered unpainted T4 commercial bus were later handed over to R R S personnel who were on pin down at Chisco along Lekki Ajah They were all later moved down to Ilasan Police Station for further investigations One of the rescued passengers by the name Christopher Omukoro said he boarded the unpainted commercial bus from Alfa Beach going to Ikate The General Manager of LASTMA Bolaji Oreagba has advised Lagos residents to always ensure they board buses at designated garages and always be vigilant keen eyed especially when boarding public vehicles he added MEANWHILE LASTMA has warned motorists particularly commercial bus drivers against driving vehicles with loaded containers filled with petroleum products to guide against fire outbreaks Taofiq said We are all aware of queues at different petrol filling stations right now but it is a great risk and very dangerous for motorists particularly commercial bus drivers to be moving around with petroleum products in jerry cans inside booths of their vehicles It is equally expedient to remind motorists that as we are approaching the last month of the year the dry season is already here which makes it very dangerous for motorists to be carrying fuel in jerry cans while in transit as this may speed up havoc which are not prepared for To avoid causing any undue obstructions to other road users motorists must ensure that they have C cautions wheel spanners jack and spare tyres and visible headlamps in case of any unexpected emergency He advised motorists to also shun reckless driving over speeding dangerous overtaking overloading One way wilfull obstructions disobeying traffic lights and others as no recalcitrant drivers would be spared for any lawlessness on the road Taofiq said adhering to traffic rules and regulations as contained in the Lagos State Transport Sector Reform Law 2018 would ensure safety of lives of owners drivers and their passengers
    LASTMA hands over notorious one-chance gang to police
    Cautions motorists against driving vehicles loaded with petroleum productsOfficials of Lagos State Traffic Management Authority LASTMA yesterday handed over two members of a one chance robbery gang to Ilasan Police Station Lagos The suspects were nabbed yesterday at Ikate Lekki Ajah area of Lagos Director Public Affairs Department LASTMA Adebayo Taofiq who disclosed this in a statement said patrol team of the agency arrested the suspects while on duty monitoring and controlling traffic around the Lekki Ajah area of the state According to the spokesperson Our officials while on traffic patrol heard passengers with loud voices shouting at the thieves inside an unpainted T4 commercial bus AAA 750 XX While trying to stop the driver he drove dangerously and our men pursued them with a LASTMA patrol vehicle to Ikate where they were blocked by another pathfinder car belonging to a good Samaritan Taofik confirmed that while two suspects were arrested two escaped with the Point of Sales PoS machine which they used to withdraw passengers money inside the commercial bus The two suspects with the recovered unpainted T4 commercial bus were later handed over to R R S personnel who were on pin down at Chisco along Lekki Ajah They were all later moved down to Ilasan Police Station for further investigations One of the rescued passengers by the name Christopher Omukoro said he boarded the unpainted commercial bus from Alfa Beach going to Ikate The General Manager of LASTMA Bolaji Oreagba has advised Lagos residents to always ensure they board buses at designated garages and always be vigilant keen eyed especially when boarding public vehicles he added MEANWHILE LASTMA has warned motorists particularly commercial bus drivers against driving vehicles with loaded containers filled with petroleum products to guide against fire outbreaks Taofiq said We are all aware of queues at different petrol filling stations right now but it is a great risk and very dangerous for motorists particularly commercial bus drivers to be moving around with petroleum products in jerry cans inside booths of their vehicles It is equally expedient to remind motorists that as we are approaching the last month of the year the dry season is already here which makes it very dangerous for motorists to be carrying fuel in jerry cans while in transit as this may speed up havoc which are not prepared for To avoid causing any undue obstructions to other road users motorists must ensure that they have C cautions wheel spanners jack and spare tyres and visible headlamps in case of any unexpected emergency He advised motorists to also shun reckless driving over speeding dangerous overtaking overloading One way wilfull obstructions disobeying traffic lights and others as no recalcitrant drivers would be spared for any lawlessness on the road Taofiq said adhering to traffic rules and regulations as contained in the Lagos State Transport Sector Reform Law 2018 would ensure safety of lives of owners drivers and their passengers
    LASTMA hands over notorious one-chance gang to police
    Foreign2 months ago

    LASTMA hands over notorious one-chance gang to police

    •Cautions motorists against driving vehicles loaded with petroleum productsOfficials of Lagos State Traffic Management Authority (LASTMA), yesterday, handed over two members  of a one-chance robbery gang to Ilasan Police Station, Lagos. 

    The suspects were nabbed yesterday at Ikate, Lekki-Ajah area of Lagos. 

    Director, Public Affairs Department, LASTMA, Adebayo Taofiq, who disclosed this in a statement, said patrol team of the agency arrested the suspects while on duty monitoring and controlling traffic around the Lekki-Ajah area of the state.   

    According to the spokesperson: “Our officials while on traffic patrol heard passengers with loud voices shouting at the thieves inside an unpainted T4 commercial bus (AAA 750 XX).

    While trying to stop the driver, he drove dangerously and our men pursued them with a LASTMA patrol vehicle to Ikate, where they were blocked by another pathfinder car belonging to a good Samaritan.

    ”  Taofik confirmed that while two suspects were arrested, two escaped with the Point of Sales (PoS) machine, which they used to withdraw passengers’ money inside the commercial bus. 

    “The two suspects with the recovered unpainted T4 commercial bus were later handed over to R.

    R.S personnel who were on pin-down at Chisco, along Lekki- Ajah. “They were all later moved down to Ilasan Police Station for further investigations. 

    “One of the rescued passengers by the name Christopher Omukoro said he boarded the unpainted commercial bus from Alfa-Beach going to Ikate.   

    “The General Manager of LASTMA, Bolaji Oreagba, has  advised Lagos residents to always ensure they board buses at designated garages and always be vigilant/keen-eyed, especially when boarding public vehicles,” he added.

    MEANWHILE, LASTMA has warned motorists, particularly commercial bus drivers, against driving vehicles with loaded containers filled with petroleum products to guide against fire outbreaks. 

    Taofiq said: “We are all aware of queues at different petrol filling stations right now but, it is a great risk and very dangerous for motorists particularly commercial bus drivers to be moving around with petroleum products in jerry cans inside booths of their vehicles. 

    “It is equally expedient to remind motorists that as we are approaching the last month of the year, the dry season is already here which makes it very dangerous for motorists to be carrying fuel in jerry cans while in transit as this may speed up havoc which are not prepared for.

    ” “To avoid causing any undue obstructions to other road users, motorists must ensure that they have C-cautions, wheel spanners, jack and spare tyres, and visible headlamps in case of any unexpected emergency.

    ”   He advised motorists to also shun reckless driving, over-speeding, dangerous overtaking, overloading, One-way, wilfull obstructions, disobeying traffic lights and others, as no recalcitrant drivers would be spared for any lawlessness on the road.

    Taofiq said  adhering to traffic rules and regulations as contained in the Lagos State Transport Sector Reform Law, 2018 would ensure safety of lives of owners, drivers and their passengers.

  • As tens of millions of Americans began to travel for Thanksgiving experts warned that tripledemic cases of COVID 19 RSV respiratory syncytial virus and flu are increasing in the United States Nearly 55 million Americans are expected to travel over the long holiday weekend according to AAA estimates On Monday the US Federal Aviation Administration FAA said this Tuesday will be one of the busiest days leading up to Thanksgiving with more than 48 000 flights expected across the country The FAA estimates that nearly 400 000 flights will fly over the United States from November 19 to 27 with 23 000 flights scheduled for Thanksgiving As Americans head into the holiday season health experts anticipate the country could experience a new wave of respiratory illnesses as more people travel and gather indoors Experts are concerned about the confluence of influenza RSV and coronavirus warning grim threats of a triple epidemic Two new Omicron subvariants BQ 1 and BQ 1 1 have overtaken BA 5 to be the dominant strains in the United States BQ 1 1 accounted for about 24 2 percent of circulating variants in the week ending Nov 19 with BQ 1 estimated to account for 25 5 percent according to the latest data from the Centers for Control and the US CDC Preliminary data suggests that the two variants descended from Omicron s BA 5 subvariant are better at evading immunity from COVID 19 vaccines including new bivalent boosters or prior COVID 19 infection than older versions from Omicron That may give the two subvariants greater transmissibility which could fuel a surge in cases this winter A rapidly intensifying flu season is overloading hospitals that are already overloaded with patients sick with COVID 19 RSV and other respiratory infections The CDC estimates that so far this flu season there have been at least 4 4 million illnesses 38 000 hospitalizations and 2 100 deaths from the flu More than half of US states have high or very high levels of flu according to a government report released Friday Those 27 states are mostly in the South and Southwest but include growing numbers in the Northeast Midwest and West CDC data shows that more than 26 000 RSV tests came back positive between October 30 and November 12 a significantly higher number than the number recorded for the same period last year RSV is a common respiratory virus that usually causes mild cold like symptoms But it s particularly dangerous for children under the age of two because they have smaller windpipes that collect more mucus and lungs that need more support to breathe according to the CDC We are in the midst of a true triple epidemic said Dr Jake Lemieux an assistant professor of medicine at Harvard Medical School and an infectious disease specialist at Massachusetts General Hospital There are a lot of warning flags regarding the upcoming holiday season Health experts encourage people to get vaccinated and practice safety precautions during the upcoming vacation Xinhua
    Summary: Experts Warn ‘Tripledemia’ Cases Rise as Americans Travel for Thanksgiving
    As tens of millions of Americans began to travel for Thanksgiving experts warned that tripledemic cases of COVID 19 RSV respiratory syncytial virus and flu are increasing in the United States Nearly 55 million Americans are expected to travel over the long holiday weekend according to AAA estimates On Monday the US Federal Aviation Administration FAA said this Tuesday will be one of the busiest days leading up to Thanksgiving with more than 48 000 flights expected across the country The FAA estimates that nearly 400 000 flights will fly over the United States from November 19 to 27 with 23 000 flights scheduled for Thanksgiving As Americans head into the holiday season health experts anticipate the country could experience a new wave of respiratory illnesses as more people travel and gather indoors Experts are concerned about the confluence of influenza RSV and coronavirus warning grim threats of a triple epidemic Two new Omicron subvariants BQ 1 and BQ 1 1 have overtaken BA 5 to be the dominant strains in the United States BQ 1 1 accounted for about 24 2 percent of circulating variants in the week ending Nov 19 with BQ 1 estimated to account for 25 5 percent according to the latest data from the Centers for Control and the US CDC Preliminary data suggests that the two variants descended from Omicron s BA 5 subvariant are better at evading immunity from COVID 19 vaccines including new bivalent boosters or prior COVID 19 infection than older versions from Omicron That may give the two subvariants greater transmissibility which could fuel a surge in cases this winter A rapidly intensifying flu season is overloading hospitals that are already overloaded with patients sick with COVID 19 RSV and other respiratory infections The CDC estimates that so far this flu season there have been at least 4 4 million illnesses 38 000 hospitalizations and 2 100 deaths from the flu More than half of US states have high or very high levels of flu according to a government report released Friday Those 27 states are mostly in the South and Southwest but include growing numbers in the Northeast Midwest and West CDC data shows that more than 26 000 RSV tests came back positive between October 30 and November 12 a significantly higher number than the number recorded for the same period last year RSV is a common respiratory virus that usually causes mild cold like symptoms But it s particularly dangerous for children under the age of two because they have smaller windpipes that collect more mucus and lungs that need more support to breathe according to the CDC We are in the midst of a true triple epidemic said Dr Jake Lemieux an assistant professor of medicine at Harvard Medical School and an infectious disease specialist at Massachusetts General Hospital There are a lot of warning flags regarding the upcoming holiday season Health experts encourage people to get vaccinated and practice safety precautions during the upcoming vacation Xinhua
    Summary: Experts Warn ‘Tripledemia’ Cases Rise as Americans Travel for Thanksgiving
    Foreign2 months ago

    Summary: Experts Warn ‘Tripledemia’ Cases Rise as Americans Travel for Thanksgiving

    - As tens of millions of Americans began to travel for Thanksgiving, experts warned that "tripledemic" cases of COVID-19, RSV (respiratory syncytial virus) and flu are increasing in the United States.

    Nearly 55 million Americans are expected to travel over the long holiday weekend, according to AAA estimates.

    On Monday, the US Federal Aviation Administration (FAA) said this Tuesday will be one of the busiest days leading up to Thanksgiving, with more than 48,000 flights expected across the country. The FAA estimates that nearly 400,000 flights will fly over the United States from November 19 to 27, with 23,000 flights scheduled for Thanksgiving.

    As Americans head into the holiday season, health experts anticipate the country could experience a new wave of respiratory illnesses as more people travel and gather indoors.

    Experts are concerned about the confluence of influenza, RSV and coronavirus, warning grim threats of a "triple epidemic."

    Two new Omicron subvariants, BQ.1 and BQ.1.1, have overtaken BA.5 to be the dominant strains in the United States. BQ.1.1 accounted for about 24.2 percent of circulating variants in the week ending Nov. 19, with BQ.1 estimated to account for 25.5 percent, according to the latest data from the Centers for Control and the US CDC.

    Preliminary data suggests that the two variants, descended from Omicron's BA.5 subvariant, are better at evading immunity from COVID-19 vaccines, including new bivalent boosters, or prior COVID-19 infection than older versions. from Omicron.

    That may give the two subvariants greater transmissibility, which could fuel a surge in cases this winter.

    A rapidly intensifying flu season is overloading hospitals that are already overloaded with patients sick with COVID-19, RSV and other respiratory infections.

    The CDC estimates that so far this flu season, there have been at least 4.4 million illnesses, 38,000 hospitalizations, and 2,100 deaths from the flu.

    More than half of US states have high or very high levels of flu, according to a government report released Friday. Those 27 states are mostly in the South and Southwest, but include growing numbers in the Northeast, Midwest, and West.

    CDC data shows that more than 26,000 RSV tests came back positive between October 30 and November 12, a significantly higher number than the number recorded for the same period last year.

    RSV is a common respiratory virus that usually causes mild, cold-like symptoms. But it's particularly dangerous for children under the age of two because they have smaller windpipes that collect more mucus and lungs that need more support to breathe, according to the CDC.

    "We are in the midst of a true 'triple epidemic,'" said Dr. Jake Lemieux, an assistant professor of medicine at Harvard Medical School and an infectious disease specialist at Massachusetts General Hospital. "There are a lot of warning flags regarding the upcoming holiday season."

    Health experts encourage people to get vaccinated and practice safety precautions during the upcoming vacation. ■



    (Xinhua)

  • As tens of millions of Americans began to travel for Thanksgiving experts warned that tripledemic cases of COVID 19 RSV respiratory syncytial virus and flu are increasing in the United States Nearly 55 million Americans are expected to travel over the long holiday weekend according to AAA estimates On Monday the US Federal Aviation Administration FAA said this Tuesday will be one of the busiest days leading up to Thanksgiving with more than 48 000 flights expected across the country The FAA estimates that nearly 400 000 flights will fly over the United States from November 19 to 27 with 23 000 flights scheduled for Thanksgiving As Americans head into the holiday season health experts anticipate the country could experience a new wave of respiratory illnesses as more people travel and gather indoors Experts are concerned about the confluence of influenza RSV and coronavirus warning grim threats of a triple epidemic Two new Omicron subvariants BQ 1 and BQ 1 1 have overtaken BA 5 to be the dominant strains in the United States BQ 1 1 accounted for about 24 2 percent of circulating variants in the week ending Nov 19 with BQ 1 estimated to account for 25 5 percent according to the latest data from the Centers for Control and the US CDC Preliminary data suggests that the two variants descended from Omicron s BA 5 subvariant are better at evading immunity from COVID 19 vaccines including new bivalent boosters or prior COVID 19 infection than older versions from Omicron That may give the two subvariants greater transmissibility which could fuel a surge in cases this winter A rapidly intensifying flu season is overloading hospitals that are already overloaded with patients sick with COVID 19 RSV and other respiratory infections The CDC estimates that so far this flu season there have been at least 4 4 million illnesses 38 000 hospitalizations and 2 100 deaths from the flu More than half of US states have high or very high levels of flu according to a government report released Friday Those 27 states are mostly in the South and Southwest but include growing numbers in the Northeast Midwest and West CDC data shows that more than 26 000 RSV tests came back positive between October 30 and November 12 a significantly higher number than the number recorded for the same period last year RSV is a common respiratory virus that usually causes mild cold like symptoms But it s particularly dangerous for children under the age of two because they have smaller windpipes that collect more mucus and lungs that need more support to breathe according to the CDC We are in the midst of a true triple epidemic said Dr Jake Lemieux an assistant professor of medicine at Harvard Medical School and an infectious disease specialist at Massachusetts General Hospital There are a lot of warning flags regarding the upcoming holiday season Health experts encourage people to get vaccinated and practice safety precautions during the upcoming vacation Xinhua
    Experts warn that cases of “tripledemia” are rising as Americans travel for Thanksgiving.
    As tens of millions of Americans began to travel for Thanksgiving experts warned that tripledemic cases of COVID 19 RSV respiratory syncytial virus and flu are increasing in the United States Nearly 55 million Americans are expected to travel over the long holiday weekend according to AAA estimates On Monday the US Federal Aviation Administration FAA said this Tuesday will be one of the busiest days leading up to Thanksgiving with more than 48 000 flights expected across the country The FAA estimates that nearly 400 000 flights will fly over the United States from November 19 to 27 with 23 000 flights scheduled for Thanksgiving As Americans head into the holiday season health experts anticipate the country could experience a new wave of respiratory illnesses as more people travel and gather indoors Experts are concerned about the confluence of influenza RSV and coronavirus warning grim threats of a triple epidemic Two new Omicron subvariants BQ 1 and BQ 1 1 have overtaken BA 5 to be the dominant strains in the United States BQ 1 1 accounted for about 24 2 percent of circulating variants in the week ending Nov 19 with BQ 1 estimated to account for 25 5 percent according to the latest data from the Centers for Control and the US CDC Preliminary data suggests that the two variants descended from Omicron s BA 5 subvariant are better at evading immunity from COVID 19 vaccines including new bivalent boosters or prior COVID 19 infection than older versions from Omicron That may give the two subvariants greater transmissibility which could fuel a surge in cases this winter A rapidly intensifying flu season is overloading hospitals that are already overloaded with patients sick with COVID 19 RSV and other respiratory infections The CDC estimates that so far this flu season there have been at least 4 4 million illnesses 38 000 hospitalizations and 2 100 deaths from the flu More than half of US states have high or very high levels of flu according to a government report released Friday Those 27 states are mostly in the South and Southwest but include growing numbers in the Northeast Midwest and West CDC data shows that more than 26 000 RSV tests came back positive between October 30 and November 12 a significantly higher number than the number recorded for the same period last year RSV is a common respiratory virus that usually causes mild cold like symptoms But it s particularly dangerous for children under the age of two because they have smaller windpipes that collect more mucus and lungs that need more support to breathe according to the CDC We are in the midst of a true triple epidemic said Dr Jake Lemieux an assistant professor of medicine at Harvard Medical School and an infectious disease specialist at Massachusetts General Hospital There are a lot of warning flags regarding the upcoming holiday season Health experts encourage people to get vaccinated and practice safety precautions during the upcoming vacation Xinhua
    Experts warn that cases of “tripledemia” are rising as Americans travel for Thanksgiving.
    Foreign2 months ago

    Experts warn that cases of “tripledemia” are rising as Americans travel for Thanksgiving.

    - As tens of millions of Americans began to travel for Thanksgiving, experts warned that "tripledemic" cases of COVID-19, RSV (respiratory syncytial virus) and flu are increasing in the United States.

    Nearly 55 million Americans are expected to travel over the long holiday weekend, according to AAA estimates.

    On Monday, the US Federal Aviation Administration (FAA) said this Tuesday will be one of the busiest days leading up to Thanksgiving, with more than 48,000 flights expected across the country. The FAA estimates that nearly 400,000 flights will fly over the United States from November 19 to 27, with 23,000 flights scheduled for Thanksgiving.

    As Americans head into the holiday season, health experts anticipate the country could experience a new wave of respiratory illnesses as more people travel and gather indoors.

    Experts are concerned about the confluence of influenza, RSV and coronavirus, warning grim threats of a "triple epidemic."

    Two new Omicron subvariants, BQ.1 and BQ.1.1, have overtaken BA.5 to be the dominant strains in the United States. BQ.1.1 accounted for about 24.2 percent of circulating variants in the week ending Nov. 19, with BQ.1 estimated to account for 25.5 percent, according to the latest data from the Centers for Control and the US CDC.

    Preliminary data suggests that the two variants, descended from Omicron's BA.5 subvariant, are better at evading immunity from COVID-19 vaccines, including new bivalent boosters, or prior COVID-19 infection than older versions. from Omicron.

    That may give the two subvariants greater transmissibility, which could fuel a surge in cases this winter.

    A rapidly intensifying flu season is overloading hospitals that are already overloaded with patients sick with COVID-19, RSV and other respiratory infections.

    The CDC estimates that so far this flu season, there have been at least 4.4 million illnesses, 38,000 hospitalizations, and 2,100 deaths from the flu.

    More than half of US states have high or very high levels of flu, according to a government report released Friday. Those 27 states are mostly in the South and Southwest, but include growing numbers in the Northeast, Midwest, and West.

    CDC data shows that more than 26,000 RSV tests came back positive between October 30 and November 12, a significantly higher number than the number recorded for the same period last year.

    RSV is a common respiratory virus that usually causes mild, cold-like symptoms. But it's particularly dangerous for children under the age of two because they have smaller windpipes that collect more mucus and lungs that need more support to breathe, according to the CDC.

    "We are in the midst of a true 'triple epidemic,'" said Dr. Jake Lemieux, an assistant professor of medicine at Harvard Medical School and an infectious disease specialist at Massachusetts General Hospital. "There are a lot of warning flags regarding the upcoming holiday season."

    Health experts encourage people to get vaccinated and practice safety precautions during the upcoming vacation. ■



    (Xinhua)

  • Four people lost their lives when a Toyota Sienna bus ran into a moving Sino truck from the rear on the Abeokuta Sagamu expressway on Thursday Mr Babatunde Akinbiyi the Ogun Traffic Compliance and Enforcement Corps TRACE spokeswoman confirmed the incident to reporters in Abeokuta on Friday Akinbiyi explained that the accident occurred at 7 18 p m at Adedero in front of Adaranijo Filling Station along the route saying the vehicles were travelling inbound to Abeokuta I learnt the Toyota Sienna marked AAA 307 GN was inbound Abeokuta and the driver was driving behind the truck which belongs to a cement manufacturing company when it ran into the truck from behind due to speed The driver was unable to ascertain the fact that a vehicle was in his front coupled with the smoke emitting from the truck marked WDL 418 XA which also had no rear light he said He said all the victims were males The TRACE spokesperson stated that the deceased were deposited at the morgue of State Hospital Ijaye in Abeokuta He commiserated with the families of the victims and warned drivers to avoid excessive speed saying that drivers of articulated vehicles should also ensure they service their vehicles regularly
    4 die in Ogun road accident
    Four people lost their lives when a Toyota Sienna bus ran into a moving Sino truck from the rear on the Abeokuta Sagamu expressway on Thursday Mr Babatunde Akinbiyi the Ogun Traffic Compliance and Enforcement Corps TRACE spokeswoman confirmed the incident to reporters in Abeokuta on Friday Akinbiyi explained that the accident occurred at 7 18 p m at Adedero in front of Adaranijo Filling Station along the route saying the vehicles were travelling inbound to Abeokuta I learnt the Toyota Sienna marked AAA 307 GN was inbound Abeokuta and the driver was driving behind the truck which belongs to a cement manufacturing company when it ran into the truck from behind due to speed The driver was unable to ascertain the fact that a vehicle was in his front coupled with the smoke emitting from the truck marked WDL 418 XA which also had no rear light he said He said all the victims were males The TRACE spokesperson stated that the deceased were deposited at the morgue of State Hospital Ijaye in Abeokuta He commiserated with the families of the victims and warned drivers to avoid excessive speed saying that drivers of articulated vehicles should also ensure they service their vehicles regularly
    4 die in Ogun road accident
    Foreign2 months ago

    4 die in Ogun road accident

    Four people lost their lives when a Toyota Sienna bus ran into a moving Sino truck from the rear on the Abeokuta-Sagamu expressway on Thursday.

    Mr Babatunde Akinbiyi, the Ogun Traffic Compliance and Enforcement Corps (TRACE) spokeswoman, confirmed the incident to reporters in Abeokuta on Friday.

    Akinbiyi explained that the accident occurred at 7:18 p.

    m. at Adedero in front of Adaranijo Filling Station along the route, saying the vehicles were travelling inbound to Abeokuta.

    “I learnt the Toyota Sienna marked AAA 307 GN was inbound Abeokuta, and the driver was driving behind the truck, which belongs to a cement manufacturing company, when it ran into the truck from behind, due to speed.

    ” The driver was unable to ascertain the fact that a vehicle was in his front, coupled with the smoke emitting from the truck, marked WDL 418 XA, which also had no rear light,” he said.

    He said all the victims were males.

    The TRACE spokesperson stated that the deceased were deposited at the morgue of State Hospital, Ijaye in Abeokuta.

    He commiserated with the families of the victims and warned drivers to avoid excessive speed, saying that drivers of articulated vehicles should also ensure they service their vehicles regularly.

  • The Ogun Traffic Compliance and Enforcement Corps TRACE on Tuesday said that two persons died while four others sustained injured in an accident that involved a commercial bus truck and motorcycle around Conoil Bus Stop on Lagos Abeokuta highway Mrs Temitope Oseni the Owode Ijako Unit Commander of TRACE who confirmed the incident told the News Agency of Nigeria in Ota that the unfortunate incident happened at about 10 03 p m on Monday Oseni explained that a Daf blue truck with registration number AAA 094 XT was heading to Abeokuta from Sango Ota on a top speed and developed brake failure and rammed into a commercial Mazda bus marked FKJ 509 XX and a Bajaj motorcycle marked FFF 416 XY She said that six persons were involved in the crash in which two people died while four others sustained various injuries The corpses of the victims had been taken to State Hospital Ota while the survivors are receiving treatment at the same hospital Oseni advised motorists against speeding and dangerous driving to avoid loss of lives and property She further advised them to always ensure that their vehicles were in good condition before putting them on the roads to prevent mishaps NewsSourceCredit NAN
    2 die, 4 injured in road crash on Lagos-Abeokuta expressway 
    The Ogun Traffic Compliance and Enforcement Corps TRACE on Tuesday said that two persons died while four others sustained injured in an accident that involved a commercial bus truck and motorcycle around Conoil Bus Stop on Lagos Abeokuta highway Mrs Temitope Oseni the Owode Ijako Unit Commander of TRACE who confirmed the incident told the News Agency of Nigeria in Ota that the unfortunate incident happened at about 10 03 p m on Monday Oseni explained that a Daf blue truck with registration number AAA 094 XT was heading to Abeokuta from Sango Ota on a top speed and developed brake failure and rammed into a commercial Mazda bus marked FKJ 509 XX and a Bajaj motorcycle marked FFF 416 XY She said that six persons were involved in the crash in which two people died while four others sustained various injuries The corpses of the victims had been taken to State Hospital Ota while the survivors are receiving treatment at the same hospital Oseni advised motorists against speeding and dangerous driving to avoid loss of lives and property She further advised them to always ensure that their vehicles were in good condition before putting them on the roads to prevent mishaps NewsSourceCredit NAN
    2 die, 4 injured in road crash on Lagos-Abeokuta expressway 
    Defence/Security3 months ago

    2 die, 4 injured in road crash on Lagos-Abeokuta expressway 

    The Ogun Traffic Compliance and Enforcement Corps (TRACE) on Tuesday said that two persons died while four others sustained injured in an accident that involved a commercial bus, truck and motorcycle around Conoil Bus-Stop on Lagos-Abeokuta highway.

    Mrs Temitope Oseni, the Owode-Ijako Unit Commander of TRACE, who confirmed the incident, told the News Agency of Nigeria in Ota that the unfortunate incident happened at about 10: 03 p.

    m. on Monday.

    Oseni explained that a Daf blue truck with registration number, AAA 094 XT, was heading to Abeokuta from Sango-Ota on a top speed and  developed brake failure, and rammed into a commercial Mazda bus marked FKJ 509 XX  and a Bajaj motorcycle marked FFF 416 XY.

    She said that six persons were involved in the crash in which two people died, while four others sustained various injuries.

    “The corpses of the victims had been taken to State Hospital, Ota, while the survivors are receiving treatment at the same hospital.

    ” Oseni advised motorists against speeding and dangerous driving, to avoid loss of lives and property.

    She further advised them to always ensure that their vehicles were in good condition before putting them on the roads to prevent mishaps.


    NewsSourceCredit: NAN

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