Microsoft’s earnings rise on cloud computing

Microsoft beat market expectations Tuesday with strong quarterly performance in cloud computing and software, still benefitting from the pandemic's online shifting of work, play, shopping and learning.

The US tech colossus, which announced last week a blockbuster deal to buy gaming giant Activision Blizzard, said profit jumped to $18.8 billion in the final three months of last year.

"Digital technology is the most malleable resource at the world's disposal to overcome constraints and reimagine everyday work and life," CEO Satya Nadella said, in announcing revenue of $51.7 billion.

Microsoft investments include pouring money into the booming video game market and by extension the metaverse, the virtual reality vision for the internet's future.

On an earnings call, Nadella pointed to the tens of millions of people playing games such as Forza, Halo and Minecraft, many investing in "avatar" proxies for online worlds, saying that the metaverse is a natural extension.

Microsoft is also meshing virtual gathering components with non-game offerings, such as Teams online collaboration software, according to executives.

"We feel very well positioned to be able to catch what I think is essentially the next wave of the internet," Nadella said on the call.

The Redmond, Washington-based tech company last week announced a landmark deal to buy scandal-hit "Call of Duty" maker Activision for $69 billion.

This would be the largest buyout ever for Microsoft, well ahead of LinkedIn in 2016 for $26.2 billion.