Microsoft Corporation (MSFT): This Is Why It Pays to Keep Your Faith in This Company

Microsoft Corporation (NASDAQ:MSFT)’s bright idea

At the same time, the integration of Advanced Micro Devices, Inc. (NYSE:AMD)’s processors into its forthcoming Xbox console has been a smart decision on behalf of Microsoft. This is because using AMD’s processors will lessen the initial cost of making these machines, a benefit that is also being enjoyed by Sony Corporation (ADR) (NYSE:SNE) now. With this decision, Microsoft has moved away from the earlier Power PC technology that was prevalent in the Xbox 360 and into the x86 technology that powers today’s computers. At the same time, Microsoft can also hope to attract more game developers that actually design games for the smartphone and tablet segments. AMD’s SoC integration will now make it easier for them to design newer games for the upcoming Xbox.

Going in the right direction

At the end, Advanced Micro Devices, Inc. (NYSE:AMD) still has miles to go if it hopes to make a decent turnaround. However, the company seems to be taking baby steps towards a possible recovery. Having said that, it’ll take much more than the current wins to reduce its still overwhelming dependence on the sagging PC industry, and to add to its troubles, the video game market itself does not seem to be in very good shape. That’s because the trend is increasingly towards online and mobile gaming, a fact which Microsoft Corporation (NASDAQ:MSFT), Sony and Nintendo are all aware of.

The decision by Microsoft Corporation (NASDAQ:MSFT) is undoubtedly a big design win for AMD and its crucial wins in the gaming console market should stand it in good stead. At the same time, the company is going all-out to cut costs, as it searches for new avenues of growth. This is one stock that is priced real cheap right now, and it’s got good prospects for recovery. Time to have a re-think on this one, maybe.

Subhadeep Ghose has no position in any stocks mentioned. The Motley Fool recommends Intel Corporation (NASDAQ:INTC) and NVIDIA Corporation (NASDAQ:NVDA). The Motley Fool owns shares of Intel and Microsoft.