The world's largest software maker,
) finally announced that its newly-released Xbox One console will
be available from Nov 2013 priced at $499 in the U.S., €499 in
Europe and £429 in the United Kingdom.
The new console comes with
Advanced Micro Devices Inc.'s
) x86 octa-core processor, USB 3.0 ports, 500GB hard drive, 8GB
DDR3 RAM and a blu-ray drive. On top of it all, it comes with
Wi-Fi, which helps in exchanging data with other devices.
Microsoft is marketing its console as an all-in-one
entertainment device i.e. users can enjoy live TV from cable as
well as a satellite set-top box through the console. Further,
users can customize the Home dashboard with their favorite games,
TV and entertainment. The device also comes with Kinect motion
sensor for gesture and voice control. With all these features,
Microsoft's Xbox One is clearly more than simply a video game
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.
However, the new console is steeply priced at $499, which is
$200 more than the previous version launched in 2005. It seems
that Microsoft is targeting hardcore gamers who are willing to
spend any amount for new consoles. The steep pricing may keep
away casual gamers thus affecting Microsoft's gaming market
Microsoft's closest competitor in the game console business,
), has already announced its plans to release PlayStation 4 in
time for the Christmas holidays. This makes sense as the holiday
season is usually the time when demand for game consoles
increases. Another competitor
) new game system, Wii U, was released last November.
Microsoft may come under pressure as Sony did not disclose the
price of its soon-to-be-launched PS4 and now a window of
opportunity may open up for Sony to sell its console at a lower
Microsoft also needs to consider competition from social
games. 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 compatible with these devices. Only time will tell
whether the new Xbox can regain some lost market share for
Microsoft reported revenues excluding deferrals of $20.49
billion in the third quarter of fiscal 2013, down 4.5%
sequentially but up 17.7% from last year, more or less in line
with our estimates. All segments grew strongly from the year-ago
quarter but declined only slightly from the seasonally strong
December quarter. Microsoft's Business Division grew both
sequentially and year over year.
Microsoft has a Zacks Rank #3 (Hold).
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