Microsoft Corporation (MSFT): The Ultimate Goal of Xbox One May Surprise You

Page 1 of 2

We’re getting a new Xbox, and unlike Sony Corporation (ADR) (NYSE:SNE)‘s cryptic PS4 unveiling earlier this year, we actually got to see Microsoft Corporation (NASDAQ:MSFT)‘s shiny new toy.

Microsoft Corporation (NASDAQ:MSFT) unveiled its latest gaming console today — Xbox One — and it comes at a crucial time, with industry sales falling sharply for more than three years.

There was a desperate need for Mr. Softy to raise the bar. Did it?

“For the first time, you and your TV will have a relationship,” went the introductory clip, leaving little doubt that the software giant’s new machine wants to be the cornerstone of your home theater.

The Xbox has always tried to be about more than just gaming, but now it’s almost an afterthought. The big selling point of Xbox One and the beefed up Kinect controller make it seamless to switch from gaming, video, music, Internet Explorer, and now Skype and live TV. Tapping into the Xbox Live community and a user’s friends provide access to trending content.

A new console isn’t a guaranteed shot glass of elixir. Just ask Nintendo Co., Ltd (ADR) (OTCBB:NTDOY). The Japanese video game pioneer wanted to get a leg up on its rivals by introducing Wii U last year. It was a holiday dud, and now even marquee developers are having second thoughts about putting out games for the dual-screen system in the future.

Microsoft Corporation (NASDAQ:MSFT) won’t have that problem. Even though video game industry sales plunged 25% last month (according to researcher NPD Group), the Xbox 360 has been the top-selling console for 21 consecutive months. It will be the last console standing, and that will guarantee at least initial stateside developer support. Toward the end of the presentation, Activision Blizzard, Inc. (NASDAQ:ATVI) revealed that when its highly anticipated Call of Duty: Ghosts comes out in November, exclusive downloadable content will be available to Xbox One gamers.

Does that mean that the new system will be out in November? Microsoft Corporation (NASDAQ:MSFT) only revealed that it will be out later this year, but it’s a safe bet that Microsoft will want to be out in time to cash in on the telltale holiday season and snuff out Sony.

However, even Microsoft Corporation (NASDAQ:MSFT) knows that updating a tiring platform isn’t enough. The introduction late last year of Windows 8 wasn’t enough to turn PC sales around. Why should a new Xbox bring back game sales?

It’s naturally not just Microsoft Corporation (NASDAQ:MSFT) investors that will be hoping for a victory lap. GameStop Corp. (NYSE:GME) — the leading stand-alone video game retailer — is expected to post declining sales and earnings for its latest quarter come Thursday. It could use an Xbox One boost, but it may not come.

Page 1 of 2