Is there just no need for Microsoft Office any more? Tech giant Microsoft (MSFT) may not want to hear that, but it could be a factor working against it regardless. While Microsoft Office was once top of the heap for productivity, multiple factors shook up the market and turned Office into an also-ran in the market it once ruled. Investors did not seem particularly concerned, though, and sent shares up modestly in Monday afternoon’s trading.
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Microsoft’s own changes have not exactly helped spur demand. The move to take Microsoft Office, add a few more components like Teams and OneNote, and call it Microsoft 365 instead has left users a bit nonplussed. The addition of Copilot AI did not help either, as many users dismissed “AI slop” out of hand. Throw in a hefty price hike, and the whole situation did not look good for Microsoft from the outset.
Then there was the matter of the free replacements. Microsoft really cannot copyright or patent a word processor program, so numerous alternatives came out. From LibreOffice to OpenOffice and a host of others, several platforms basically outdid Office while demanding far less from their user bases. It was only individual organization requirements that kept some using Office in any capacity.
Game Pass Shifts
Meanwhile, Microsoft is looking to adjust its Game Pass options to get more users into the fold. Cheaper Pass options may be in the offing, and the possibility of a bundled Game Pass or even an ad-supported tier could be coming into play before too much longer.
While these are only potential developments for now, appealing to the budget gamer is likely to prove a smart play. The difference between appealing to a budget gamer and not is whatever that gamer would have spent. Multiply that difference by several thousand, even several hundred thousand, gamers, and soon you have a significant market that needs addressing…and may go elsewhere.
Is Microsoft a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on MSFT stock based on 33 Buys and three Holds assigned in the past three months, as indicated by the graphic below. After a 4.96% loss in its share price over the past year, the average MSFT price target of $583.68 per share implies 62.38% upside potential.
