Microsoft
MSFT
recently made minor changes to the logo and the name of its Xbox Game Pass for PC subscription service. The service is now renamed as PC Game Pass. The company made the announcement last week through its official
PC Game Pass Twitter handle.
Microsoft’s Xbox Game Pass subscription service has acted as a tailwind for its video game business. Subscription services guarantee a steady and recurring revenue stream.
Microsoft has three different subscription plans — Game Pass Ultimate, PC Game Pass and Game Pass for Console.
The PC Game Pass for $9.99 a month allows gamers to access 100 high-quality PC video game titles. Currently, for the first month, users only need to pay $1 for the service. Game Pass for Console permits access to 100 console games to users for $9.99 per month.
Microsoft’s Xbox Game Pass Ultimate subscription allows gamers to play over 100 titles for $14.99 per month on PC, console and Android devices. This service includes both Xbox Live Gold and Electronic Arts’ EA Play, while PC Game Pass includes EA Play.
The company’s Game Pass subscription service, introduced in 2017, has been a enormous success with more than 18 million worldwide users.
Microsoft Corporation Price and Consensus
Microsoft Corporation price-consensus-chart
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Microsoft Corporation Quote
Microsoft Eyes Lucrative Gaming Market
Microsoft is striving to expand its video game business as the gaming industry is witnessing a spurt. Cloud gaming has emerged as the key catalyst driving the overall video game market.
According to a Mordor Intelligence report
, the worldwide gaming market is expected to witness a CAGR of 9.64% between 2021 and 2026 and reach $314.4 billion.
Another report from Mordor Intelligence
projects the cloud gaming market to witness a CAGR of 45.2% between 2021 and 2026.
In October 2021, the company
rolled out
its Xbox cloud gaming service in Australia, Brazil, Japan and Mexico bundled with Xbox Game Pass Ultimate subscription. With the launch in these four countries, the company’s cloud gaming is now available in 26 countries across the globe.
By bundling cloud gaming with Xbox Game Pass Ultimate service (at no additional cost), Microsoft is looking to fortify its competitive stance in the cloud gaming space.
Microsoft announced that it will extend its cloud gaming to Xbox Series X and Series S along with Xbox One consoles around the upcoming holiday season at the Gamescom 2021 Xbox Stream event held in August 2021.
However, the revenue potential in the booming gaming space has attracted many players, thereby heating up the competition.
A few days back, it was reported by
Bloomberg
that
Sony
SNE
was working on a new subscription service akin to Microsoft’s Game Pass and is apparently codenamed “Spartacus.”
Sony is expected to launch the service in the spring of 2022, stated Bloomberg. The service is anticipated to be available on both PlayStation 4 and 5.
Zacks Rank & Stocks to Consider
At present, Microsoft currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector include
Arrow Electronics
ARW
and
Alphabet
GOOGL
. While Alphabet sport a Zacks Rank #1 (Strong Buy), Arrow Electronics carries a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here.
For Arrow Electronics, the Zacks Consensus Estimate for 2021 earnings is pegged at $14.60 per share, up 8.1% in the past 60 days. The long-term earnings growth rate of the company is pegged at 27.4%.
Arrow Electronics’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 18.6%. Shares of the company have rallied 30% year to date.
For Alphabet, the Zacks Consensus Estimate for 2021 earnings is pegged at $108.29 per share, up 6.3% in the past 60 days. The long-term earnings growth rate of the company is pegged at 25.8%.
Alphabet’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 41.5%. Shares of the company have rallied 68.9% year to date.
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