Will Microsoft lose the consumer PC market?

The PC is thriving. Windows is not.

The decline of the PC has long been exaggerated. Way back in 2008, while running a PC hardware review site, I got quite a bit of unsolicited advice from folks about how we needed a strategy to deal with the rise of the mobile market and—folks assumed—the coming decline of desktop systems. Those folks weren’t wrong about the bright future for mobile computing, but they completely whiffed on the other side of that equation. Today, PC gaming and desktop computing are both arguably stronger than ever.

My own desktop sports a pair of massive, 4K HDR displays, a custom mechanical keyboard, a sit-stand desk, custom bookshelf speakers and an amp, a Herman Miller chair, a nice microphone, and a Sony mirrorless camera acting indulgently as my webcam. In this regard, I am not an outlier. One can pop on to reddit’s r/battlestations and see an incredible collection of similar setups, most of which are more tastefully arranged than my own. From content creation to remote work to gaming and more, desktop computing is still very much in demand, and folks are still building elaborate systems—and full desk setups—to make it possible.

So when I have something to say about the decline of one aspect of the PC ecosystem, my instinct is to step carefully.

Still, I have been struck lately by an impression that seems simultaneously rather obvious and yet impossible: that Microsoft is losing the consumer PC market with Windows. Like that overused Hemingway quotation about how one goes bankrupt—Windows may be losing the consumer market two ways: gradually, then suddenly.

The gradually part has been apparent for years, of course. There is a long, unfortunate history of Windows being mismanaged on many fronts. But lately, it feels like the Windows sled is cresting the hill of decline, and the sudden plunge downward is coming.

A story about reaping and sowing

Microsoft has a storied history of competing with software developers who tried to build on its Windows platform. One of the last major attempts, in my view, happened a decade ago when both Oculus and Valve tried to build VR gaming businesses based on Windows PCs. The trajectory of that particular episode was laughably predictable at the time. Microsoft ramped up its own Windows MR effort, sapped the enthusiasm from SteamVR and Oculus, and then abandoned the Windows MR ecosystem before it was ever even half baked.

Practically everyone saw that mess coming before it happened. Regardless of VR’s challenges with broad consumer appeal, the whole situation was an object lesson for anyone paying attention. Why would any third party build a new business that relies on Microsoft’s Windows platform? I don’t think there has been a good answer to that question for a decade or so.

Some of these episodes have very long tails. Valve and Oculus (which became Meta) learned their lessons. Meta shifted its VR efforts to standalone headsets running an Android-derived OS. Valve, meanwhile, saw the threat not just to SteamVR but to the entire Steam store from Microsoft’s own initiatives. So it continued investing in the work that became a collection of enabling technologies for PC gaming—and its whole Steam ecosystem—to move away from reliance on Windows.

Enhancements to Linux compatibility tools like Proton and the DXVK graphics compatibility layer eventually led to the successful release of the Steam Deck. With a relatively modest GPU, that system is capable of running quite a few games well—in part because DXVK’s graphics API translations to Vulkan proved more effective at avoiding frame-time spikes than Microsoft’s own native Direct3D implementation on Windows.

Today, Valve offers the Linux-based Steam Machine as a home gaming console, while the just-released Steam Frame headset continues Valve’s long commitment to consumer VR hardware—many years after Microsoft quit on Windows MR.

Valve has also invested in the FEX emulator for Linux that allows x86 and x64 programs to run on Arm CPUs. With Proton, DXVK, and FEX working together, Steam Frame headsets running Linux on Arm SoCs can run some SteamVR games for Windows locally on the headset. Performance is still a limiting factor, of course, but the reality remains: the software infrastructure exists to run PC games—even latency-sensitive VR games, of all things—entirely outside of the traditional Wintel ecosystem.

PC gaming, once the premier application that ensured lock-in to x86 hardware and the Windows OS, has become a portable capability on Linux thanks to compatibility layers funded in part by Valve.

Long tail, indeed.

Momentum

This is just one of many such stories. One or two of them alone would be unfortunate for the future of the Windows platform, but taken together, they feel like so many pebbles tumbling down the hill that presage the start of a much larger avalanche. A tiny stone here or there might be nothing much, but they sure seem to be accumulating at an alarming, accelerating rate.

Some of the problem is rot within Windows itself.

My family used a Windows 10 system to drive our TV for years. It was nice because we could stream from any service and play PC games on a single system, never having to swap inputs. Also, having a real keyboard for search is excellent. Late last year, I built a new Windows 11 HTPC and also upgraded to a nifty new TV with 4K HDR, wide color gamut, high refresh rates, and so forth. Seemed like a natural upgrade on both fronts.

Turns out, however, that most video streaming services simply do not support 4K HDR video streaming to Windows 11. I was shocked. That means no Windows-based laptop, desktop, or tablet can play premium video formats from HBO Max, Disney+, and so forth. (Some progress has been made recently on Netflix and Apple TV+, but the picture otherwise is dire.) More importantly, that means Microsoft has not put sufficient effort into the technology and relationships required to ensure proper premium-format video support from the streamers.

Our solution was to buy an Apple TV 4K and live with input swapping. The Apple TV streams everything well.

Despite the fact that Microsoft has a digital rights regime for Windows registration and increasingly unavoidable requirements for online user accounts—and that these measures would seem to work to limit OS piracy—as a Windows user, one increasingly feels more like the product than the customer.

After every major Windows update, once or twice a year on each system, I have done the dance of hitting decline-decline-next in order to refuse the Office 365 sign-up, only to be greeted with aggressive shilling for Edge.

Search from the Start menu used to be a reliable way to launch programs. Then it became a menu that produced web results when I typed the name of an installed application into the search field. Now it may also inadvertently launch some ill-conceived Copilot feature no one wants.

I had another example, but Windows rebooted to install an update before I could finish writing it out, and I forgot. You get the idea, though.

One gets the sense the decay has been accelerating.

Meanwhile, I’ve spent a little time with Macs lately, and the logically organized settings app that mirrors what I see on my iPhone makes using macOS feel familiar despite my inexperience with it. Contrast that with the multi-layered geological sedimentation that is Windows settings. The modern settings application has limited functionality. Beneath it are various control panel layers and dialogs dating from Windows 10 through Vista and all the way back to NT4. Ever has it been, and apparently, ever shall it be.

Some larger rocks join the mix

The situation grew more alarming when a bigger rock came bounding down the hill in the form of the MacBook Neo launch this past spring. Sure, you’d have seen 90% MacBooks in a typical U.S. coffee shop for years. But Apple always stayed upmarket with its MacBooks, ceding the lower end of the market to everyone else. With the Neo, Apple chose to use its iPhone chips to build affordable laptops at scale—and had an instant hit on its hands. The Neo looks to me like a much nicer system than the competing offerings from the likes of HP, Lenovo, and others. Odds are that Apple will eat up a sizeable chunk of the laptop market with the Neo and its successors.

I expect this development would be a bigger story if not for the insane AI hardware crunch affecting the entire computing market. Even in that context, though, the Neo poses a threat. A laptop config with 8 GB of RAM, if unfortunately necessary, is probably somewhat more workable on a Mac than on Windows thanks to macOS’s more efficient use of memory.

Why Windows, really?

In the larger picture, it’s hard to see how Windows could completely lose the consumer market, one it has dominated for many years. But if enough rocks get enough momentum at once, the question will get answered definitively.

Also, well, what will stop this trend?

My sense is that Microsoft has no compelling vision for the future of Windows. To this day, they’ve offered no clear sense of how the OS can work well on touch-screen devices. And we have no good set of reasons why consumers ought to prefer Windows-based systems to the alternatives.

The Office suite used to be part of that answer, but that argument has little resonance with a generation raised on Google Docs and other browser-based apps. Meanwhile, the vast majority of AI development—and local AI tinkering among enthusiasts—is happening on Linux.

Put another way: who is rooting for Windows? Even PC enthusiasts and gamers don’t seem to be any longer. Many appear to be looking for an exit, contemplating a move to Linux or a Mac, if they haven’t already made such a move. I may not step away from Windows entirely anytime soon, but my own path as an enthusiast and gamer is likely to involve more Linux, maybe more macOS, and more purpose-built solutions like the Apple TV going forward.

It almost seems as if Microsoft’s chokehold on PC gaming now rests almost entirely on specific problems, like Linux compatibility with anti-cheat software, that could be resolved if game publishers start taking the Steam Machine seriously.

Sure, corporate laptops may stick with Windows for a while, but that is not a consumer market. The obvious trajectory there is that users at firms with BYOD policies will simply choose other options, and Windows’ share of that market will continue eroding. Eventually, if enough consumers reject Windows, corporate IT departments will have to accommodate their users’ preferences, too.

More than any single other factor, the vibes are simply not good. The recent, slow decline of Windows may soon turn into something more severe, because there is precious little preventing the slide. Oddly, if and when that happens, I’m not sure anyone outside of Redmond will mind much at all.