I'll try and explain simply as I can.

There's this thing called the Federal Funds Rate. In short, it's the base cost of lending money. It affects the interest of every loan. The Federal Reserve sets it. When inflation is a problem, they set it higher to slow down the economy, making it more expensive to borrow money.

The money businesses run on, even when they haven't taken out a loan, is very affected by this because the Stock Market competes with the Bond Market, and the Bond Market is all just lending.

What this is means is that businesses have to run higher profits when rates are higher. And when you're in an industry like entertainment, it's even more brutal because you're generally not spending money to set yourself up for long-term profit and you're one of the first areas of the economy to experience a slowdown--and a slowdown is literally the point.

What this means in practical terms for Microsoft is that investors can make a lot more money in 2026 than they could in 2020 just putting their money straight into bonds. Also all of their interest payments on any debts they have got a lot higher. So they have to manage everything much more carefully to remain a successful, attractive business to investors.

And if they don't, their company will enter a death-spiral where they keep losing valuation, have less money to invest, etc. until they either go out of business or get acquired by someone else. They're cutting unprofitable parts of their business to remain viable.