With the curious case of Microsoft initially announcing VR support for Xbox One X and then later pulling the plug before launch, it wasn’t clear if the company would use its next console as its opportunity to finally jump into VR. Today at E3 2019, Microsoft revealed its next-gen Xbox ‘Project Scarlett’ but had nothing to say about VR on the console. Meanwhile, Sony has already confirmed support for PSVR on PS5, and hinted at plans for a next-gen headset.

Today at E3 2019, Microsoft capped off their keynote presentation with the announcement of Xbox Project Scarlett, the company’s next-gen console which will bring powerful new hardware to your living room come holiday 2020.

Microsoft is focusing heavily on pure performance improvements as the primary innovation of Xbox Project Scarlett.

Based on Zen 2 and Navi processors from AMD, the new console is said to be “four times more powerful than the Xbox One X.” In addition to support for 120Hz output, 8K resolution, variable framerate, and hardware accelerate ray-tracing, Xbox Project Scarlett is equipped with a super speedy SSD and GDDR6 for drastically reduced loading times, the company says. Microsoft is also promising that the console will support the same content as existing Xbox One and Xbox One X consoles.

Unsurprisingly, Project Scarlett sounds quite a bit like Sony’s next-gen console, which the company has spilled some hardware details on, but hasn’t made a proper announcement just yet. Where the two consoles majorly differ right now from a feature standpoint is VR support. Microsoft has yet to mention VR at all with regards to Project Scarlett, while Sony recently confirmed that PS5 will support the existing PSVR, and also teased what a next-gen headset might look like from the company.

We’ve reached out to Microsoft for comment on plans to support VR on Xbox Project Scarlett.

Microsoft has had something of a messy history with VR and Xbox. This writeup explores that history (and its relationship to the Xbox’s biggest competitor) in more detail, but in short, the latest Microsoft has said on the matter was last year when it affirmed the company doesn’t have “any plans specific to Xbox consoles in virtual reality or mixed reality […].”

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Ben Lang
Ben is the world's most senior professional analyst solely dedicated to the XR industry, having founded Road to VR in 2011—a year before the Oculus Kickstarter sparked a resurgence that led to the modern XR landscape. He has authored more than 3,000 articles chronicling the evolution of the XR industry over more than a decade. With that unique perspective, Ben has been consistently recognized as one of the most influential voices in XR, giving keynotes and joining panel and podcast discussions at key industry events. He is a self-described "journalist and analyst, not evangelist."
  • Matilde Constance

    Very disappointing!

  • Nepenthe

    24 TFLOPS?

    • Bob

      No it’s 4x the overall compute of the console:

      There’s an interview from Matt Booty about this:

      “Matt Booty: It’s a few things – it’s the combination of speed, not just of the SSD but of the processor, the performance of the GPU and RAM, but we’re also in a world where speed is starting not to matter. You can make RAM faster either by speeding up the way you access it or by adding more access points. Just think, what are all the things right now which take you out of a game? You’re playing then suddenly *bloop* a load screen pops up and drops you out. Our goal is to get rid of those things, that’s what we’re after.”

      • Nepenthe

        Good information, thanks. But to Matt’s question, “what are all the things right now which take you out of a game,” I’d reply that viewing it on a screen and not all around me (i.e. in VR) is a huge one if we’re talking immersiveness.

  • ehhh

    Microsoft did exactly what I thought they would. They announced their new console and gave some specs that will be encouraging to both developers and consumers. Given that it’s still a year and a half away from release, Microsoft can’t afford to tell all their console secrets. If you consider what was said, it is obvious that the console will be a major player for VR. I would expect a VR bundle next holiday, or soon after the initial release. They hinted at wanting to be more immersive in their announcement and nothing is more immersive than VR. There’s also lots of room for improvement for VR, so I wouldn’t expect them to announce anything until much closer to release.

    • realtrisk

      That’s a thought…

    • Agree completely with you!

    • kalel33

      It was obvious that the Xbox One X was going to get VR too, since they actually said at the E3 show that it would be something added in the future. Recently, the head of Xbox said that they VR is more for the computer and that they only want to focus on the TV.

      • Who’s this?

        That’s a dangerous game to lose on. Sony is not gambling money on PSVR, it was a success… So if Sony continues then they will pull further away from Microsoft.

        • Froot

          There is already patents for PSVR2 and its quite clear that Sony is bringing PCVR to PS5, so Xbox already lost. Maybe its that why they arent trying to focus on it, but its a dumb decision.

    • Gonzax

      I don’t expect anything at all from Xbox in terms of VR for the forthcoming future.

    • They did mention “it is the most immersive gaming console, ever” and so to be that, it has to include VR as that is where the highest quality of immersive gaming exists as of current and next gen.

      • Froot

        They say that stuff all the time, its PR.
        They also said they were bringin 120Hz for the first time to gamers, but on PC we’re already at 240Hz and going up.

    • Gordon Walker Dewey

      Also, they just announced a unique feature called https://www.theverge.com/2019/6/9/18656694/microsoft-project-xcloud-game-streaming-price-e3-2019“Console Streaming”, which really sounds a lot like something they already do for Hololens, called “Holographic Remoting”, which offloads some of the rendering remotely. If this method is good enough for low-latency cloud gaming, shouldn’t it be enough for low-latency same WiFi network VR?

  • Trenix

    I gave up on console gaming years ago. I returned to try Xbox One, rather than the Playstation 4. I thought it would be better than spending thousands to upgrade my computer. It has been the worst decision I’ve ever made. Big seller was the Kinect, they abandoned it and it worked terribly. Microsoft is out of the picture of console gaming, just like it is with mobile. They should stick to computers.

    Also multiple accessories for the Xbox One had to be replaced and repaired upon release. I never experienced such problems before.

    • Gordon Walker Dewey

      Lol, “out of the picture”. That’s ridiculous! I own an X1X and a PS4 Pro. There are honestly both great things and not so great things about both systems. Xbox has some great features that PlayStation doesn’t, like playing every generation’s games, and with better graphics than they have been seen before. It’s like getting free remasters with the X. Also system-wide Dolby Atmos sound is KILLER! They are making bank with Xbox, and still selling all generation’s games congruently, as well as Gamepass. I use my PS4 almost entirely for VR and a few exclusives. Nothing beats the Xbox Elite controller for regular games, but they’ve got no VR, which is also lame. The Move controllers are just dumb, and so was not passing HDR with the gen 1 PSVR; but OTOH, at least they have VR. There’s a world of possibilities when you have 2 system, and you aren’t a plastic worshiper.

      • Trenix

        Xbox sold 1/3 of what playstation sold in systems. Xbox One lacked exclusives, lacked a good game line-up, had worse specs, and had controllers that continuously broke and were far inferior. Xbox was a complete failure upon release and honestly, that’s all that matters. Could have the newer versions improved the original? Perhaps, but I’m left with the original that is kicking up dust along with the kinect that is no longer being supported.

        Xbox gave the middle finger to it’s fans, failed to deliver, and there are still fans like you that are ok with it. Have some self respect, bet you own an Oculus Rift S. Don’t expect Xbox to compete with Playstation, the mixed reality headsets are also a complete joke. It’s only a matter of time before another operating system wipes Microsoft off the market. Their recent operating systems were a joke, Xbox One is a joke, Mixed Reality is a joke, and their phones have literally failed and been abandoned.

        The only thing Microsoft has is Minecraft, which is why they spent billions on it. Dream on.

        • Gordon Walker Dewey

          Maybe it’s time to put your blue-tinted glasses on the table for a sec. Microsoft CEO Satya Nadella just recently ended their Build conference with a tribute to gaming and game developers. That’s not E3, it’s an event for all of Microsoft. Next, Xbox under Phil Spencer today is not the Xbox of 2013. Microsoft isn’t even the same company as 2013. In fact, they have just recently reemerged as the biggest company in the world once more, over Apple, Google, and Amazon. They have been maintained to stay in the top 3 since last year. Microsoft doesn’t even need to fight Sony. Sony is small fish, relatively speaking. Google, Apple, and Amazon are the real competition. This is why Sony has teamed up to use Microsoft servers. Amazon will be next to get into gaming, after Google Stadia. Your little console war is just a big deal in your head. 99% of games are multi anyway. Microsoft sells plenty of games and game services… They actually have to report their earnings. That’s how business works! Their gaming division has made huge profits in those earnings. It’s in the news. You should probably read more. Also, the gaming industry has never been about selling x amount of consoles. They don’t make their revenue on hardware. It’s actually not about that, and never really has been. If you think Xbox is failing, you have no actual grasp on reality.

          • Trenix

            You’ve said absolutely nothing of value and have no grasp on business nor the competitive market. The only thing that makes Microsoft relevant, is their operating system which is pretty much a monopoly. This is despite making worse version of their operating system yet. Sony is such a small fish that they pretty much own the entire console gaming market, selling far more products and earning way more profit than anyone on the list.

            Before you talk about business, maybe educate yourself a bit more. The Xbox was a complete failure.

          • Froot

            Satya Nadella, the same guy that wanted to close Xbox. That tribute is just PR, Phil Spencer IS the one fixing things.. but whatever Nadella does or says, has nothing to do with the reality of Xbox.

            Both Nadella and Gates wanted to see the Xbox division closed, not sure who convinced Gates but Phil convinced Nadella to let him fix the company.

      • Michael Slesinski

        theres nothing you can do on an xbox that i cant do (better) on a pc, all the xbox exclusives are on pc. as for the rip-off that an elite controller is.. enjoy it until the bumper breaks. they suck, or there wouldnt be repair kits on amazon specifically for it.

        i hate sony with a burning fury, but atleast when they use the word “exclusive” it really means exclusive.. even if their controllers are for asian girl hands.

    • Froot

      Yes and no. Their console is better in terms of perfomance and their backwards compatibility tech is outstanding, but their focus is a mess. They insisted on doing a lot of multiplayer games that were awful and invested into Kinect wich was a failure since day 1, that lead them to be a joke when it comes to Xbox vs Playstation. Just now, with Phil Spencer in charge, and being part of the Microsoft board, Xbox is starting to focus.. but its too late for this gen, will have to wait and see for the next one.

      But I do agree that they should focus on PC, maybe become an AAA PC only publisher or even focus on PC but also release on Playsation/Nintendo, its a win-win for them and they dont need to lose money on dumb consoles.

  • Honestly they would be crazy not to support VR out the gate on this next gen console – just as VR headsets are about to get really good with 4k screens, wireless and inside-out tracking fixing every major early adopter complaint. The software is much more mature too with enough studios ready to jump into AAA production as soon as the numbers can support it. This is the next major shift similar to transition from 2D to 3D, and although VR won’t replace flat screen gaming, I can see them splitting the market 50/50 in about 5-7 years. MS better not sleep or they will be feeding fish next to Sega.

    • mirak

      VR/AR will replace flatscreens one day, because you can simulate any flat screen with VR/AR.

      • Miqa

        Not really. You cannot play split-screen in your couch with friends in VR, while using only a single device.

        • mirak

          Why would you use a single device ?
          Everybody will have is vr glasses the same we everyone have his phone.

          • Miqa

            Same reasons you do today. Cost, convenience, space etc. Most of the time, today, you won’t be bringing your own console and TV to your friend. And what if they have a PS and you have a XBOX? I’m not sure that will change. Even if VR becomes as ubiquitous as phones (which I sincerely doubt), the devices may not work together or perhaps have limited computational power to the device corresponding with current consoles.

        • Split screen will remain a niche market on classic TV gaming as it is one device shared. VR should be an optional add-on, not a replacement to a console. If you want a full replacement then get a Quest or two or three.

          • Miqa

            I agree. All I’m saying is that some of the flat-screen experience likely won’t be replaced by VR.

        • Bruce

          No, instead you’re in the game with them.

          • Miqa

            Yes, which will arguably be the better experience. But it won’t be the same experience. Which is why some people will still prefer the old way.

        • arlene

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        • Froot

          Split screen is mostly dead so thats not a big concerne

        • REAPER-IronWolfSolutions

          Um…. that’s not entirely true.
          VR system gaming and entertainment in general is able to function in that way
          if you dont focus on literal split screen.
          Throw your headset on, join up with your buddy, load your game. Your each going to have your screen view, so not split. Movies & video entertainment will be a more shared experience.

          I’ve seen more avatar type visual interactions in terms of seeing your friends. However, with the current trending growth in the digital audio +video communication activity, a year is a decent amount of time for a VR intigration method to come out.
          Hell if you think about it, the kinect and VR scanners like the one with the vive, could easily be combined and upgraded, with the functional aspect showing a 3d you. Movements would be visable without much difficulty, but when you are wearing a headset it’s difficult to get the facial parts I imagine.

          It’s a different video display but if I’m gaming with some of my buddies from the good old days, we play with Skype on pc screens.
          I mean playing any fighting, racing, or sports type game with someone you have known since grade school, vocals are nice but a full f you, flip the bird type behavior brings it back. All that’s missing is the random attack/tackle, throw their controller and quickly destroy them in Mario kart.

          Main point I think VR will bring us back closer to the hanging out playing split screen atmosphere than current gaming.

  • Uhm, I think they will announce it sooner or later. With Blood & Truth having become the most sold game in UK, Beat Saber having become so popular, it is impossible that Microsoft releases a console that won’t support VR sooner or later. It will come later down the line, I am sure about that.

    • kalel33

      Microsoft’s chief marketing officer of gaming Mike Nichols said that “we don’t have any plans specific to Xbox consoles in virtual reality or mixed reality.” Nichols goes on to say that the PC is “probably the best platform” for virtual and mixed reality, and that for the Xbox, “our focus is primarily on experiences you would play on your TV.”

      • Gordon Walker Dewey

        I believe that quote is about a year old. Not saying that their attitude has yet changed, either. He did follow that quote saying “As an open platform, it just allows faster, more rapid iteration.” I take that part as Microsoft wanting the medium to mature first, but you could probably read it different ways.

    • Gordon Walker Dewey

      I agree with this. In fact, they have slipped a few times that they were waiting for the technology to mature, as well as become wireless.

  • VR4EVER

    So another Xbox for me to skip. Sadly MS let me down since the fantastic X360. Not going without VR (especially wireless) anymore. We will see how it all pans out, there is still some time left…

    • Froot

      Everything on Xbox is going to PC,even the new Halo, so they literally just told us to not buy their consoles ever again.

  • ¥DK¥

    I’d sooner expect compatibility with 3rd party desktop HMDs than a dedicated Microsoft VR headset.
    It would play much better for them, would boost their PC Console ecosystem.

    • FireAndTheVoid

      I highly doubt that Microsoft would enable compatibility with anything other than a dedicated Xbox HMD. The reason is that developers need to know exactly which hardware they need to target for performance. Although Xbox ‘Project Scarlett’ sounds like a relatively high-spec console, developers will still be constrained when it comes to VR performance. They need a guarantee on the HMD hardware in order to squeeze every last ounce of performance out of the console/HMD and know that the customer will have a good playing experience.

      • Xron

        Hmz… New gen xbox will have the perf of Gtx ~1080 combined with ~3600 zen2 cpu… (maybe even 8core chip) so more than enough power for decent vr…

  • Ugur Ister

    Microsoft, as they admit themselves, massively botched the initial unveiling of the Xbox One and it took them an entire generation to try to catch up with Sony in sales and the xbox is still far behind right now.
    Reviewing it after the fact, the main misstep there early on was that they had too mixed messaging and trying to do many things with (to many) not enough focus on regular games.
    So it doesn’t come as a surprise to me that this time around they try to push as hard as possible “we heard you, and this time we focus all on gaming first”.
    No media playback device focus or other side experiments on launch touted in big way.

    Now the new console, based on the specs announced so far, would definitively be able to power a nice VR headset with performance intensive games pretty well, so a VR headset coming out later would still be totally possible.
    What worries me more there is that the Windows Mixed Reality strategy going forward is not clear, or more, it is not clear to me how much long term investment we can expect from MS.
    I saw about partners releasing more Windows MR VR headsets, bu i haven’t heard any VR news by MS themselves for quite a while.
    Next to that the UWP platform largely was rejected to a degree where MS had to backpadel from it for regular desktop apps/games and the Windows store, with the sole exception being that it still seems to be enforced to be used for Hololens and WMR stuff. So not sure if they will want to stillenforce UWP deploy for WMR stuff or not and overall what their strategy for their VR stuff is going forward if any.

    And regarding headsets and controllers, well the HP Reverb is a pretty nice new WMR headset but basically severely limited by still having to ship with the massively worse than the current competition tracking with only two cams and also not that great controllers. In this fast evolving still young market, if a player doesn’t provide any updates for a year or two, they are already falling way behind in what people expect by then in year 3.

    I’d like it if MS still pushes on with VR stuff, more players means more selection and progress for all, but yeah, i hope they improve the tracking with multiple cams and progress the controllers to touch/ index controllers levels.

    Alternatively it would be quite interesting to me if MS would do a broadened coop with Valve so that one could more easily use Valve index controllers (with their base stations) with WMR headsets, too (then all running via SteamVR i think). In less hacky/finnicky way.

    The problem is MS has cancelled so many hardware devices over the past few years when they didn’t take off after 1-3 gens in big way that if they don’t release improved tracking and controllers soon (nor at least announce them), there is the risk that more and more people then quickly see them as giving up on WMR / VR in general and again and dunno how often they expect users and devs to still put any trust in their offerings when it is all too often either full giving up or “we just focus on enterprise now with this going forward”.

  • impurekind

    I’m very disappointed with Microsoft’s complete ignorance of and unwillingness to be part of the awesomeness that is VR.

  • Kev

    They say repeatedly it’s all about “choice” and yet they remove VR from the menu as a choice.

  • Ted Joseph

    I am near the end of Blood and Truth on my PSVR, and I have decided to unplug my Xbox One X. For Sony – London Studios to make a game as amazing as this with old men move controllers (and they actually work quite well) has not only amazed me, but gained my respect fully as a console gamer. I will most likely cancel my Xbox subscription, and not by the next Xbox in 2020, but go fully onto Sony with the PS5. KUDOS to Sony for moving the bar forward!

  • sfmike

    Microsoft isn’t willing to develop VR with their next gen console unless they can guarantee huge immediate profits. Since they can’t, they won’t. That’s the way big corporations work. Risk aversion is a number one goal.

    • Graham

      I’m not convinced. If it’s as simple as “thats the way big corporations work” then why are Sony investing in VR? They weren’t / aren’t guaranteed huge immediate profits either but they seem to be trying to push things forward. Microsoft have just been a HUGE let down when it comes to Xbox and VR.

      • Michael Slesinski

        sony has already cannibalized so many things they use to have that they HAVE to take the risk.

    • Gordon Walker Dewey

      They don’t have to be pushing WMR for PC either, but I know what you are saying. Kinect was a huge risk that bit them. AR and VR are obviously big to them. They are just too scared to screw with mainstream console gaming again. It’s kind of a shame, really.

  • If they don’t mention VR and its games prior to console release, then they dont give a damn about VR gaming.

    Already seems that way.

    Microsoft is Building VR MMO for Xbox and PC, Job Listing Indicates – Jus a job listing, nothing more.

    “Microsoft says it’s no longer planning VR support on Xbox” – The Verge

    Yup, dont give a shit at all. They culd do well for VR w/ all those studios they bought, ah well.

    Guess this mixed reality is mainly for non gaming applications

  • Trenix

    Funny you should say that, as someone who has studied business and has a degree in it, a monopoly is essentially when a sector of an industry is dominated by a single corporation, where it faces no real competitive pressure. This is like comparing a light bulb to a candle, sure they’re competitors, but who is likely to choose a candle in our modern day to obtain lighting? The Windows operating system is not part of a oligopoly where a small number of firms dominate the market, because Windows solely dominates the market.

    Also cloud servers are ran on server operating systems. Microsoft manages and maintains these servers for the public that pay for such a service. Data does not just get stored on the internet, the internet is not a real place. You have no idea of what you’re talking about at all and ran into the wrong person to argue with.

    • Gordon Walker Dewey

      You must have a BS in BS. Monopoly: “the exclusive possession or control of the supply of or trade in a commodity or service.” I guess we should ignore Google, Linux, and Apple (who in the only one with exclusive hardware/software combination). You’re correct that I ran into the wrong idiot. Go home, you’re drunk!

      • Trenix

        Take a college course in business and tell the professor with a doctrine that they’re wrong, and tell the people who wrote the books they’re also wrong. The term for monopoly, when it comes to business, is exactly what I said it was. A service or a product with no real competition or substitute. Linux isn’t supported by most software, Apple is out of the picture because of price and support, and google doesn’t even have a operating system for computers. Despite that, we’re not even talking about servers, but client operating systems.

        Like I don’t even know what you’re trying to get at. You’re trying to compare operating systems with cloud services and mobile phones or something? You’re just in a world of mess, but continue believing you’re a smartass. In theory, there is NOTHING that is a true monopoly. Everything has some sort of alternative, even if it means that the alternative doesn’t provide any real competitive pressure. It’s like comparing a bike to a car, a light bulb to a candle, a board game to a gaming console, and so on. Go do some research, get an education, and stop being an idiot.

        • Gordon Walker Dewey

          I’m sorry to be the one to tell you this, but your education source has failed you. Don’t believe me? Economictimes.com says for monopoly: “Definition: A market structure characterized by a single seller, selling a unique product in the market. In a monopoly market, the seller faces no competition, as he is the sole seller of goods with no close substitute.” … OK, so Linux is definitely competition, and so is Apple. You cannot change the definition of what a monopoly is. The “mono” in the name means literally ONE, not “little”. You’re changing the definition to fit your hate word of the day. Maybe you should have went to a better school where they teach facts. You’ve also never heard of a Google Chromebook? That’s not a PC alternative? Get outta here! You are stuck on 1990s philosophy of what a computer is. PC towers are literally dying off. Windows is a dinosaur, by today’s standards. Phones and tablets are taking over as the primary device, and Surface tablet is only one of many compute options.

          Speaking of Google, you probably didn’t know that they have had to pay a licensing fee to Microsoft for for every single Android device sold, due to software patents. Well that is, until late last year, when Microsoft open-sourced those elements of Windows. Yeah, Microsoft is just so anti-competition! /S

          • Trenix

            Keyword, “no close substitute”. Apple and Linux doesn’t support most software, making them not be a close substitute for an operating system for consumers. There is a reason why they include those specific words. They didn’t say “no substitute”, they said no CLOSE substitute. You know how I know this? Because we were educated about this crap in college and there is a reason why they defined the word in that specific way. This is why I made an example of a light bulb and a candle, because it was literally used in our class to explain a monopoly. No one is going to use a damn candle in our modern day for lighting.

            Also are you really comparing a computer to a smartphone and tablet and actually believe they’re in competition? You’re on a whole other level of stupid. Smartphones are incapable of comparing with my computer at ANY level when it comes to doing most tasks, if not all. The only thing a smartphone has beyond a desktop, is mobility. Well anyway I’m not here to lecture you, any more of my time, you’ll need to pay me for it. My tower is a dinosaur, what an idiot. My computer is worth more than multiple of your phones and runs far faster than than phone could ever.

          • Gordon Walker Dewey

            I’m starting to believe that you believe your own bullsh!t. Wow. Talk about stretching the truth to fit your point of view… BTW, Apple still makes a PC equivalent, as does Google, and Linux still makes an OS. Your argument that MSFT is somehow a “monopoly”, which somehow keeps Microsoft from doing any meaningful business making games is so dumb. Just as are you for saying that you have such an expensive PC, like that really has anything to do with a monopoly or gaming, or especially even VR. What a nut case!

          • Trenix

            90%

          • Gordon Walker Dewey

            You’re so smart, and I’m really jealous! Great communication skills, to boot! You’re so “educated”, yet you act like a typical internet fanboy. Some things are better learned through life experience, but I guess some people will never learn those important life skills, and act like a child until the day they die.

          • Trenix

            Fanboy? You act like you know something about specific subjects that you are literally clueless about and yet you continue to argue with me about it. Welcome to reality, you don’t know what you’re talking about. When you aren’t sure about something, just let it go, rather than dig yourself a hole that you can’t get out of. You remind me of fakenews talking about Trump Russia collusion for years and cannot admit you’re wrong EVEN when evidence proofs it. That’s acting like a child, not me being an jerk for you being unbelievably stubborn.

  • aurelion sol

    I mean one of the main reason for buying a xbox was halo now they are porting it to pc so I really dont understain what exclusive xbox has and rumors said that xbox 2 and ps5 will have the same specs so microsoft is doing some weird choices

  • Kyokushin

    So we can assume a Microsoft will retire from WMR.

  • Froot

    They actually do make a lot of money from O.S., but corporate. They dont care about your pirating Windows cause they just grab your data or show you ads, but for companies is illegal to have pirated software so they have to buy it. In my hospital,for example, we have around 3000 computers.. all of them running Windows 7/10 Pro.. and yup,thats a lot of money. Multiply that for every other company running Windows in the world and yuuup, you guessed it, ITS A LOT OF MONEY.

    But yes, they are also shifting to Azure and stuff like that, obviously most companies also run servers and servers are what cost more. Thousands of computers are nothing compared to a bunch of servers in terms of cost, and Microsoft know that.