Microsoft's Xbox Hardware Sales Plunge 70%, Future Focus on Cloud Gaming
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2h ago
0mins
Source: Newsfilter
- Sales Decline: Microsoft's Xbox hardware sales plummeted 70% year-over-year, struggling against strong performances from competitors Nintendo Switch and Sony PlayStation, indicating a challenging position in the gaming console market.
- Layoffs and Restructuring: Microsoft laid off 1,900 employees, about 9% of its gaming division, and shut down several studios, reflecting cost-cutting pressures in pursuit of a 30% profit margin target amid rising operational costs.
- Cloud Gaming Strategy: Microsoft aims to create an open system for its next-gen Xbox that allows players to switch seamlessly between console, PC, and cloud gaming, intending to broaden its user base and adapt to future market dynamics.
- Subscription Service Growth: Xbox Game Pass subscribers reached 34 million in 2024, with annual revenue nearing $5 billion, showcasing strong growth potential for cloud gaming services despite challenges from recent price hikes.
MSFT
$485.92+Infinity%1D
Analyst Views on MSFT
Wall Street analysts forecast MSFT stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for MSFT is 631.98 USD with a low forecast of 500.00 USD and a high forecast of 700.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
35 Analyst Rating
33 Buy
2 Hold
0 Sell
Strong Buy
Current: 483.980
Low
500.00
Averages
631.98
High
700.00
Current: 483.980
Low
500.00
Averages
631.98
High
700.00
About MSFT
Microsoft Corporation is a technology company. The Company develops and supports software, services, devices, and solutions. The Company’s segments include Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. The Productivity and Business Processes segment consists of products and services in its portfolio of productivity, communication, and information services. This segment primarily comprises: Office Commercial, Office Consumer, LinkedIn, and Dynamics business solutions. The Intelligent Cloud segment consists of server products and cloud services, including Azure and other cloud services, SQL Server, Windows Server, Visual Studio, System Center, and related Client Access Licenses (CALs), and Nuance and GitHub; and Enterprise Services, including enterprise support services, industry solutions and Nuance professional services. The More Personal Computing segment primarily comprises Windows, Devices, Gaming, and search and news advertising.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
