The world's largest software maker,
), finally announced that its next-gen gaming console Xbox One
will be launched in 13 countries - U.K, U.S., Ireland, Canada,
Germany, Spain, France, Italy, Austria, Brazil, Mexico, Australia
and New Zealand - on Nov 22, 2013.
The new console comes with
Advanced Micro Devices Inc.
) x86 octa-core processor, USB 3.0 ports, 500GB hard drive, 8GB
DDR3 RAM and a blu-ray drive. It also comes with Wi-Fi that
allows data exchange with other devices.
The software giant is trying to woo back gamers in the
competitive environment. In the process, it has loaded the
console with rich gaming features and new content, while
enhancing the performance of the central processing unit by 10%to
Notably, MSFT will release its Xbox One a week after
) PlayStation 4 scheduled for a Nov 15 release in the U.S.
However, Microsoft will have a lead in other markets.
Both these gaming consoles are targeting the holiday season
when the demand for game consoles typically increase. Therefore,
a week's time gap will not make much of a difference in the sales
figures for either company.
However, Microsoft's new console is steeply priced at $499,
$200 more than the previous version launched in 2005. Sony has,
however, kept the price tag of the PS4 at $399. Another
), has also reduced the price of its Deluxe model Wii U console
by $50 to $299.99.
We believe that Microsoft may come under pressure as both
Nintendo's and Sony's gaming consoles will be available at a
lower price. Still, reports that pre-orders and first-day units
at retailers have been sold out are encouraging.
A study conducted by DFC Intelligence suggests that the global
gaming market will increase from $67.0 billion in 2012 to $82.0
billion in 2017. Further, IDC expects that there will be 257
million active consoles worldwide by 2015. These estimates
suggest that there are opportunities for gaming companies to
increase their stakes. However, the steep pricing of the Xbox One
may discourage casual gamers thus affecting Microsoft's gaming
However, the emergence of mobile platforms, such as
smartphones and tablets from Apple and Samsung, remains a
headwind for video game hardware sales. Video game publishers are
now inclined to make games that are downloadable and compatible
with these devices. Both Microsoft and Sony have considered this
change in their latest consoles, although their marketing was
different, arousing support for Sony and discontent for Microsoft
On the positive side, product transitions such as these take
time and in the meantime, the huge number of existing fans will
continue to generate revenues for both players. So, only time
will tell whether the new Xbox One can regain some lost market
Microsoft has a Zacks Rank #3 (Hold).
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