With all the chatter of Microsoft breaking above $30 and investors comparing the stock to Apple, they have forgotten a key element. Windows has the Xbox platform and as of late it has been a big portion of the company. Last quarter in the over $20 billion of Microsoft revenue, more then $4 billion was from Xbox. Apple may be winning when it comes to desktops, but they haven’t even entered the console arena. In the future years the console area may be what propels Microsoft stock.
For those that don’t believe in the power and future success of Windows 8, those skeptics can be squashed by merely mentioning Xbox. The future of Microsoft may lay in the next generation of the video console. With Xbox growing as a portion of revenue and continually creating revenue through the Xbox live platform, its profit potential is huge. The recent 15% y/y growth was merely from updating the product. What will happen when they revolutionize it? The days of consumers fighting over the gaming products at the store are far from being may in the past. As the next round of consoles looks to enter the market in the next few years, Microsoft may once again be propelled to the forefront. Consumers will once again do anything to get an Xbox.
Many fail to realize the potential of Microsoft. With the intelligence and money on hand Microsoft can do just about anything. Who’s to say that the next version of the Xbox will not have Skype integrated in it? Microsoft has revolutionized products in the past and brought one of the most successful gaming consoles to market. In the future they may revolutionize the Xbox and make it a household phenomenon, even more so then it is. Microsoft has the ability to revolutionize our home entertainment system through the means of a little black box.
The Windows platform is merely one leg Microsoft stands on. In the coming years the Xbox portion of Microsoft will grow and may be the main leg Microsoft stands on.
“Whether it’s Google or Apple or free software, we’ve got some fantastic competitors and it keeps us on our toes.” – Bill Gates