At this point, you are probably looking at your screen in a kind of stunned marvel, and pointing out that there is a picture of an Xbox just below the headline. But as it turns out, at tech giant Microsoft (MSFT), it is nowhere near that simple. It turns out that figuring out just what an Xbox is is a question very much on Microsoft’s mind. Investors seemed unshaken by this, and sent shares up modestly in the closing minutes of Thursday’s trading.
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So, what is an Xbox? Microsoft answered that, or sort of did, with its “This is an Xbox” marketing campaign from back in November. But it was not just the box you see above; no, it included a host of other devices as well, from laptops to phones to even televisions outright. With Microsoft’s recent Xbox Games Showcase proving to be somewhat lackluster, and taking into account what Microsoft has already said via the November campaign, anyone who believes that the next Xbox will be much, much different from the Xboxes of old will likely not be proven wrong. Given planned layoffs coming to the Xbox division, it might also be much smaller.
The recently-unveiled Xbox Ally hand-held devices, coupled with the November campaign and remarks that emerged just last week from Xbox president Sarah Bond that the next Xbox is “…not locked to a single store,” is leading some to wonder if the next Xbox will actually be an Xbox. Perhaps, indeed, it will be more like what it is at its roots: a highly-specialized gaming PC with a proprietary user interface, though one that will do little for, say, word processing or the like.
The True Priority
But what is Microsoft’s true priority right now? A new report out suggests what Satya Nadella has on his mind, and the implications might prove a little frightening. Microsoft’s top priority right now is not gaming. It is not cloud. It is not even artificial intelligence. “Security is our top priority.” That was what Nadella specifically called out when asked. Nadella elaborated, “…we have made significant progress against the engineering objectives we outlined 1.5 years ago as part of our Secure Future Initiative. We are now applying these learnings to deliver new innovation across our platform.”
While a certain amount of security considerations are important, even healthy, a major tech firm like Microsoft making security its top priority suggests a much darker future than some believe. And with Microsoft currently counting around 1.4 million security customers to its credit, it is clear that plenty of businesses agree.
Is Microsoft a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on MSFT stock based on 30 Buys and five Holds assigned in the past three months, as indicated by the graphic below. After a 8.7% rally in its share price over the past year, the average MSFT price target of $521.41 per share implies 4.92% upside potential.
