Microsoft (MSFT) stock was down on Thursday, and a contributing factor to this was the lackluster performance of its Xbox division. The company’s latest earnings report included an Xbox hardware sales drop of 30% year-over-year, showing that demand for the company’s video game console has dried up.
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It’s no secret that Xbox hasn’t been doing well. It’s the clear loser of the current console generation, with competitors Sony (SONY) and Nintendo (NTDOF) easily outselling the Xbox Series X|S with their own consoles. The Xbox Series X|S has been a historical failure for Microsoft as well, only slightly outselling the original Xbox. That’s saying something, as the original Xbox had to compete against the PlayStation 2, the best-selling console in history.
The lackluster performance of Xbox might help explain recent changes at the video game maker. That includes price increases for the Xbox Series X|S, a higher subscription price for Xbox Game Pass, and the company’s decision to go multiplatform instead of keeping first-party games exclusive to its console.
This has some worried that Xbox is going the way of Sega (SGAMY), which exited the console market in March 2001 following the failure of the Sega Dreamcast. Ironically, that failure is part of what helped Microsoft enter the video game market later that year, when the original Xbox launched in November 2001.
Microsoft Stock Movement Today
Microsoft stock was down 3.28% on Thursday but remained up 24.95% year-to-date. The stock has also increased 33.27% over the past 12 months. These stock gains came alongside the AI boom, which Microsoft plans to double down on with more resources dedicated to the sector.
Is Microsoft Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Microsoft is Strong Buy, based on 33 Buy ratings over the past three months. With that comes an average MSFT stock price target of $633.05, representing a potential 21.09% upside for the shares.
