Today, ladies and gentlemen, is Thanksgiving in the United States. Whether you read these words from the depths of a turkey coma or in the midst of your preparations to take on the hordes of Black Friday shoppers, it is good to have you along. Today we are going to look at the upcoming new Xbox release from tech giant Microsoft’s (MSFT), the very real possibility that it could be a game-changer, and the surprise spoiler from just about two weeks ago that may steal Microsoft’s thunder before it even has a chance to properly roll. Keep in mind, however, that we are dealing with events that will not become reality for another six months, potentially more, and the tech sector is downright infamous for unexpected change.
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The Story So Far
For those who have not already heard, Microsoft’s next Xbox console is likely to be wildly, wildly different from those released in the past. There will be similarities, of course. It is not, after all, out of line to call an Xbox a “highly specialized breed of gaming PC with a specific user interface.”
The next Xbox will also be a highly specialized breed of gaming PC with a specific user interface, but Microsoft seems to be planning to lean into the term “gaming PC” a little harder than normal. Support for other platforms like Steam or Good Old Games are both likely to be in play, meaning that games that were formerly PC titles will be available to play.
Because of the Implication
Microsoft releasing what amounts to a gaming PC with Xbox branding represents a fundamental sea change from the walled gardens of the past. The concept of “Xbox exclusive” games is, essentially, on the way out, replaced by a platform that will be able to play nearly any game, as long as it has been ported to PC. Given the state of the industry, that is nearly every triple-A game on console, and many of the independent ones.
It also means that the concept of a PlayStation exclusive out at Sony (SONY) is about to come under fire as well. While Sony is expected to keep the PlayStation 6 in the standard console vein, it is likely to lose a lot of its exclusive firepower. Once it ports a game to PC, it basically becomes an Xbox game by extension.
That Surprise Spoiler
And while this would ordinarily mean a huge win for Microsoft, there is the very real potential that a development revealed just two weeks ago will sink it before it can really start. That potential is expressed via a device known as the Steam Machine. Created by Valve—the company that owns Steam—it is essentially what Microsoft plans to release, but around two years early. The Steam Machine is a small-form gaming PC with controller, the kind that can work readily in a living room without looking woefully out of place.
With Microsoft releasing its exclusives onto PC ports as well, it falls prey to the same trap Sony will. All of its exclusives will soon be Steam Machine titles. Since Valve looks to release the Steam Machine sometime around spring 2026, at last report, it will likely beat Microsoft to release by somewhere around a year and a half, assuming Microsoft sticks to its historical scheduling. That would put the next Xbox release somewhere around late 2027, about 18 months after the Steam Machine in spring 2026.
What It All Means
Basically, look for the video game market to be very, very destabilized starting somewhere around March 2026. The old models of walled-garden releasing are about to come under serious strain, as multiple platforms start passing around titles thanks to PC ports. Microsoft could have a huge win here, as it has a dedicated fan base that would be very interested in having access to a range of titles previously unavailable to it. Access to modding far beyond the current Xbox lineup is also potentially huge.
But Valve may have pulled the teeth on Microsoft’s advance, by releasing almost the same thing, in reverse, about a year and a half ahead. One of the biggest worries about the new Xbox was its expense; some were looking for it to price at $1,200. Valve wants to keep the Steam Machine affordable, and that could sink Microsoft’s run before it really begins.
Is Microsoft a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on MSFT stock based on 34 Buys assigned in the past three months, as indicated by the graphic below. After a 14.65% rally in its share price over the past year, the average MSFT price target of $629.98 per share implies 29.76% upside potential.
