Microsoft 2024 Outlook: Why I Think Gaming Is Under-Appreciated
In a recent article published on Seeking Alpha, the author discusses Microsoft’s 2024 outlook and why they believe the gaming industry is under-appreciated. The article highlights the potential growth opportunities that Microsoft can tap into with its gaming division, and how it can impact the company’s future earnings.
Microsoft’s gaming division, which includes Xbox consoles, gaming software, and services like Xbox Live and Game Pass, has been experiencing significant growth in recent years. The author points out that despite this, the gaming business is often overlooked by investors and analysts. They argue that the gaming division has the potential to become a major revenue driver for Microsoft in the coming years.
One of the main reasons cited for the potential growth of the gaming industry is the increasing popularity of gaming worldwide. With advancements in technology and the proliferation of smartphones, more people are engaging in gaming activities than ever before. This trend is expected to continue as gaming becomes more accessible and inclusive, reaching a broader audience.
The article also highlights Microsoft’s focus on building a strong gaming ecosystem through acquisitions and partnerships. The acquisition of prominent game studios like Bethesda and the expansion of its cloud gaming service, xCloud, are seen as strategic moves to strengthen Microsoft’s position in the gaming market. By offering a wide range of high-quality exclusive games and innovative services, Microsoft aims to attract and retain gamers on its platforms.
Moreover, the author argues that the subscription-based model of Game Pass provides a stable and recurring revenue stream for Microsoft. With Game Pass, subscribers have access to a vast library of games at a monthly fee. This not only generates consistent revenues but also encourages user engagement and loyalty. The article suggests that as the subscriber base for Game Pass grows, so will Microsoft’s gaming revenues.
In terms of financials, the author predicts that Microsoft’s gaming division could reach $13.5 billion in revenue by 2024, representing a 13% compound annual growth rate. This estimate takes into account factors such as the increasing user base, growing game sales, and the continued success of Game Pass.
Overall, the author believes that the gaming industry is an under-appreciated aspect of Microsoft’s business and presents a significant growth opportunity for the company. With its strong gaming ecosystem, strategic acquisitions, and the increasing popularity of gaming worldwide, Microsoft is well-positioned to capitalize on this potential.