Microsoft Postpones Launch Of Crackdown 3 To Spring '18

Microsoft Corp. (NASDAQ:MSFT) has delayed the release of its game Crackdown 3 from Nov 7, 2017 to spring 2018, per Polygon. It was initially scheduled for release alongside the launch of the company’s new gaming console Xbox One X But a few enhancements are still in progress and hence the delay.

Per Microsoft management’s interview with Polygon, the tweaks are aimed at delivering a superior gaming experience. These will ensure that the three modes of the game, namely campaign, co-op multiplayer or competitive multiplayer mode and Wrecking Zone are in sync.

However, we believe that the delay will definitely hurt Microsoft’s top-line in the lucrative holiday season. Notably, the delay was announced a day after a similar game called Agents of Mayhem by Volition was released. Both the games were in focus at this year’s Electronic Entertainment Expo (E3).

Microsoft stock has gained 18.5% year to date, underperforming the 24.2% rally of the industry it belongs to.

Gaming Revenues Growth Trend

Microsoft’s fiscal fourth-quarter 2017 gaming revenues increased 3% (4% at CC) driven by growth in Xbox software and services. However, lack of a major game release in the upcoming holiday season will make it difficult for the company to sustain this growth trend.

Moreover, we believe that lack of credible game titles on the new Xbox platform is detrimental for the console’s unit sales, at least in the near term. This will provide further competitive edge to Sony’s (NYSE:SNE) PlayStation platform.

Per IHS Markit, Sony with its PlayStation 4 (PS4) held 51% of the gaming console market as compared with Microsoft’s 26% last year. The launch of Xbox One X is anticipated to narrow this gap.

However, stiff competition from Activision Blizzard (NASDAQ:ATVI) and Electronic Arts (NASDAQ:EA) remains a headwind.

Zacks Rank

Microsoft currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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