Microsoft (MSFT) Scores a Win on Sony's PlayStation With Forza Horizon 5
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Considering Forza Horizon 5 came out in 2021, it's impressive that Xbox was able to squeeze another 2 million sales out of it with a PS5 release. Additionally, Xbox benefits from the quick revenue boost from these sales, as compared to the long-running but lower revenue it generates from its Xbox Game Pass subscription service.
This also cements the viability of Xbox's current business model. Rather than focus on the release of exclusive games on its consoles, the company has focused on offering its games across multiple consoles, even those of its direct rivals. Doing so generates game sales from consumers who were unlikely to purchase an Xbox console but were still interested in the company's games.
What This Means for Xbox
While Xbox hasn't performed the best this console generation, lagging behind Sony's PlayStation and Nintendo's (NTDOF) Switch and Switch 2, there's still a space for it in the current video game market. Its desire to bring Xbox games to all platforms has benefited it through this period, as has its various purchases of large studios, such as Activision Blizzard and Bethesda.
If Xbox can build loyalty to its IPs across rival consoles, it could set the company up to return to an exclusive strategy. This would incentivize consumers to purchase its consoles to play their favorite titles.
Is Microsoft Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts' consensus rating for Microsoft is Strong Buy, based on 31 Buy and three Hold ratings over the past three months. With that comes an average MSFT stock price target of $533.70, representing a potential 6.11% upside for the shares.
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