It’s somewhat contradictory, but tech giant Microsoft (NASDAQ:MSFT) managed to both raise gamer ire and its own share prices with a new move in its Xbox Game Pass service. Shares were up modestly in the closing minutes of Wednesday’s trading.
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The move in question started reasonably (if unpleasantly) enough, with the announcement of a price hike on Xbox Game Pass service from $17 per month to $20. That might have been bad enough, but then Microsoft pulled a confusing end run, declaring the start of a whole new tier.
Now, there’s Game Pass Core, which used to be Xbox Live Gold. That’s the minimum to play online and offers a handful of accessible games for $10 a month. For $15 per month, users can go to Game Pass Standard, which offers the full library, except for Day One launches. Those will come “later,” and no one’s sure when that is. Finally, Game Pass Ultimate, for $20 per month, offers the full library with Day One launches.
The Xbox of the Future Is No Xbox at All
It’s not the first time we’ve heard this, but Microsoft may be pulling out of the console war altogether. Recent advertising underscored that point, as Microsoft rolled out an ad to support the recent arrival of Xbox Game Pass on Amazon (NASDAQ:AMZN) Fire Stick systems.
The ad even comes right out and says: “You don’t need an Xbox to play Xbox.” While right now, that may simply mean “you have other options,” that could soon mean that “you can’t actually buy one of these anymore.” And if the experience is sound enough, will it matter one way or another? Some, certainly, will prefer the means of the past, but maybe there will be enough gamers who simply want the games without the console.
Is Microsoft a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on MSFT stock based on 33 Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 40.78% rally in its share price over the past year, the average MSFT price target of $501.40 per share implies 7.5% upside potential.
