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Microsoft's (MSFT) Xbox Specs Raise the Bar in Console Gaming

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Microsoft (MSFT - Free Report) recently revealed a lot of details regarding the upcoming Xbox Seriex X gaming console, which is scheduled for a holiday 2020 release.

The console is equipped with Advanced Macro Devices' (AMD - Free Report) 7 nanometer (nm) technology based 8 core Zen 2 architecture CPU and an RDNA 2-class GPU. The company claims the processors provide the new console with “more than 4 times the performance of an Xbox One X.”

Further, the Series X features high bandwidth GDDR6 memory and robust NVME solid-state drive (SSD) providing internal storage capacity of 1 TB, which is aimed at making gaming more engaging.

Moreover, the company has unveiled Xbox Series X Storage Expansion Card for expanded storage capacity, developed in partnership with Seagate (STX - Free Report) , that offers additional 1 TB storage.

The company is extremely optimistic on its latest Hardware Accelerated DirectX Raytracing (DXR) capability, with which it expects to provide next-gen gamers with advanced immersive audio and visual experience.

The improved technical features, which will eventually lead to higher resolution and faster loading of the games, are expected to add to customer base.

We believe the new console is likely to help the company strengthen its competitive position in console gaming against peers like Sony , which is also gearing up for its upcoming console release, PlayStation 5 or PS5, with AMD-powered processors in the holiday season of 2020.

Robust Developments to Fortify Position in Gaming

Microsoft is likely to gain traction in the console, PC and cloud gaming industry with the positive developments, which are instilling confidence in the stock. Notably, shares of the company have returned 19.4% in the past year, outperforming the industry’s rally of 2.6%.



Moreover, Microsoft actively pursues acquisitions of game development studios to enhance its exclusive gaming content. We believe the buyouts will significantly expand the gamer base. The company is well poised to benefit from the operational efficiencies and the combined innovative skills. These factors are likely to bolster originality in its gaming content. Furthermore, the expanding game portfolio bodes well.

The gaming market is projected to hit $160 billion in 2020, up 7.3% year over year, per a report by Newzoo.

Additionally, per IDC data, gaming monitor market is expected to grow to 12.2 million units in 2023 at a CAGR of 11.8%. Per Research and Markets data, the gaming console market is envisioned to hit $49.305 billion by 2023, from $39.948 billion in 2017, witnessing a CAGR of 4.11%.

Moreover, the cloud gaming market is expected to hit $3.107 billion by 2024, from $306 million in 2019 at a CAGR of 59%, according to MarketsandMarkets data.

These growth projections strengthen optimism in Microsoft’s gaming initiatives across all devices and substantiate the company’s motto of ensuring “Gaming for all.”

The company is consistently integrating cloud capabilities of Azure into its gaming segment, which is facilitating it to enhance gaming strategies and improve content. We believe these developments will keep gaming revenues ticking in the days ahead.

Zacks Rank

Microsoft currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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