It’s easy to forget sometimes that tech giant Microsoft (MSFT) has an entire gaming ecosystem. However, there was a lot of news that wasn’t especially welcome today among gamers. Investors grinned and bore it, though, as shares were up over 1.5% in the closing minutes of Tuesday’s trading.
First came a disaster for anyone waiting for Avowed, the Obsidian RPG that’s said to be essentially Obsidian’s answer to The Elder Scrolls. While previously, it was poised to come out in 2024, it’s been pushed back to February 18, 2025. The reason isn’t exactly bad, but it won’t be happy news for those who have been waiting. Apparently, there are simply too many games coming out toward the end of the year as it is, and Microsoft wants to give it the best chance at success.
Meanwhile, Microsoft also instituted some changes to its store credit plans. The Microsoft Rewards program has long offered free credit for certain tasks, but now, UK Rewards members will see their ability to gather points effectively cut in half. Previously, customers could get 250 points per week or 275 for Xbox Game Pass Ultimate members. Now, it’s 150, a substantial loss.
The Next Xbox?
That wasn’t all the news that came out, though. It has been four years since the last Xbox came out, which means we should be getting close to a new version sometime in the next year or two since the average length of a console generation is now about five years. Some reports suggest that we’ll see a heavier focus on cloud gaming, which makes sense, given the rise of digital downloads. Why bother with discs, some might wonder?
And yet, with fewer people buying Xbox consoles to begin with, it’s easy to wonder just how much Microsoft cares about the platform anymore. According to the latest earnings report, Microsoft gaming hardware sales were down 42% from the previous quarter. This makes some sense, as most who want an Xbox already have one. But the numbers are enough to prompt concerns over the whole field in general.
Is Microsoft a Buy or Sell Right Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on MSFT stock based on 32 Buys assigned in the past three months, as indicated by the graphic below. After a 22.59% rally in its share price over the past year, the average MSFT price target of $503.19 per share implies 26.03% upside potential.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
