About 12 months ago, Microsoft removed support for embedding YouTube videos in PowerPoint following a Cease & Desist letter from Google. In an announcement on the Technet Blog, Microsoft report that:
PowerPoint 2010 and 2013 for Windows originally included support for embedding YouTube videos that were in an old format that YouTube no longer supports. As this old format started disappearing from the YouTube service, the support for YouTube videos in PowerPoint started faltering. These changes led us to disable support for inserting online videos from the product because we could not reliably support playing back YouTube videos.
The next time you update Windows, it will include a fix for whichever version of Office (2010 or 2013) that you have - alternatively, the link above to the Technet Blog has links to the updates which you can install manually.
For the past year there have been many comments on my YouTube videos, that showed how to use embed code to display a video in PowerPoint, from people who could not get my instructions to work. I made "Work around" videos (using Developer Tools) so that people could continue to use YouTube in PowerPoint. The new embed code works fine and does not need to be changed. This means I will have to remove some of the videos showing the work-arounds - I will also be interested to see if there is a noticeable effect on the analytics for the channel.
One more time - here are my two original videos (one for 2010 and another for 2013) that show you How To Embed a YouTube Video into a PowerPoint Presentation that now work properly:
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