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Microsoft Xbox One in Asia in 2014

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The world’s largest software maker, Microsoft (MSFT - Free Report) is planning to launch its latest gaming console Xbox One in Asian markets in late 2014, a year after its U.S. launch.

The new device will be available in select Asian markets such as Taiwan, Hong Kong, Singapore, South Korea and India in Nov 2014. Microsoft is yet to announce the launch date in Japan. Notably, Xbox 360 had faced difficulties in Japan.

Until the launch of the new Xbox One, Microsoft plans to continue marketing Xbox 360 and its games in Asia by adjusting the Kinect sensor. In a smart move by Microsoft, the new improved Kinect sensor has been designed to work in smaller room sizes as Asian households have smaller living space.

Microsoft is marketing Xbox One as an all-in-one entertainment device i.e. users can enjoy live TV from cable as well as a satellite set-top box through the console. Further, users can customize the Home dashboard with their favorite games, TV and entertainment. The device also comes with a Kinect motion sensor for gesture and voice control. With all these features, Microsoft’s Xbox One is clearly more than simply a video game.

The software giant is trying to woo back gamers and survive in the competitive environment. In the process, it has loaded the console with rich gaming features and new content.

Microsoft’s closest competitor in the game console business, Sony Corp. (SNE - Free Report) , has already announced its plans to release PlayStation 4 in time for the Christmas holidays. This makes sense as the holiday season is usually the time when demand for game consoles increases. Another competitor Nintendo’s (NTDOY - Free Report) new game system, Wii U, was released last November.

Microsoft also needs to consider competition from social games. The emergence of mobile platforms, such as smartphones and tablets from Apple and Samsung, remains a headwind for video game hardware sales. Video game publishers are now inclined to make games that are compatible with these devices. Only time will tell whether the new Xbox can regain some lost market share for Microsoft.

Microsoft reported revenues excluding deferrals of $20.49 billion in the third quarter of fiscal 2013, down 4.5% sequentially but up 17.7% from last year, more or less in line with our estimates. All segments grew strongly from the year-ago quarter but declined only slightly from the seasonally strong December quarter. Microsoft’s Business Division grew both sequentially and year over year.

Microsoft has a Zacks Rank #3 (Hold). Yahoo! Inc. has a Zacks Rank #2 (Buy) and is worth considering.

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