Microsoft shares jump to five-year high

Xbox maker's stock value rises to highest level since 2008 as Xbox 720 looms on horizon.

Microsoft shares have jumped to a five-year high, despite Windows 8 reportedly seeing disappointing sales since launch in October.

Shares of the company closed Tuesday at $33.10, their highest level since 2008. At press time, the company's shares are trading slightly down at $32.85.

As GameSpot sister site CNET explains, Microsoft was at one point the most valued stock in the world, but has been seen by investors as having limited growth opportunity of late.

CNET points out that the company's recent stock revival can be attributed to the viability of its enterprise software and cloud services business. Microsoft's third-quarter earnings report revealed a $6.06 billion profit for the three months ended March 31.

Microsoft's bottom line may soon see a further jolt from new gaming hardware. The company is holding a May 21 event titled "Xbox: The Next Generation Revealed," where it is widely believed to announce its long rumored Xbox 360 successor.

Microsoft is not the only gaming company to win the favor of Wall Street. Last month, specialty retailer GameStop saw its share value rise to a three-year high.

Written By

Eddie Makuch is a news editor at GameSpot, and would like to see the Whalers return to Hartford.

Discussion

214 comments
mjswooosh
mjswooosh

Ya gotta love these "Free PR" articles. MS squeezes out a steaming turd with half-truths and all the tech/gaming/OS sites gobble it up and reprint it without questioning it in any way.  In reality, Windows 8 is Millennium Two-Point-Oh. From a consumer sales perspective it has utterly failed simply because it didn't give consumers what they wanted. Win 8's ACTUAL/REAL-LIFE sales have been driven by pack-ins with laptops and very limited corporate upgrade channels, not by consumers CHOOSING to actually buy the product because it's oh-so-good. Newsflash to MS fan-boys: Most people don't like the idea of paying for a clunky "downgrade" OS for their PC. And, I have a hunch those same people who have chosen NOT to buy Win8 probably aren't going to like certain things about the 720 if the persistent rumors are true. 

From what I'm hearing (not "nerd buzz"...just "normal people buzz") most people don't want a $500 console that is as useful as a brick without a $50 a month internet connection to make it functional. Millions of Americans who live in the country and have to use dial-up? No sale. People who want a 2nd and/or 3rd 720 for the RV and the cabin? Forget it. Anyone who is self-conscious about being "always online?" No dice. And, for those who do "buy in", they get to use their 720 as a door-stop if the 'net goes down. And let's not even get started on all the negative buzz if they actually implement anti-used games measures.

Of course, it's Microsoft's arrogant prerogative to say that such "niche consumer" groups simply don't matter. But, let's face it...Win8 has been a disaster for very similar reasons: they tried to force-feed a square peg into a round hole by giving consumers something they neither needed nor wanted in the product they were offering. Big mistake.

Only time will tell if these factors will hurt MS's sales in relation to Sony's PS4. But, if I were a betting man I wouldn't bet against the market's collective psyche. People already showed that if a company stumbles and doesn't provide what they want then they can be very fickle. After the PS2's dominance, how many people gave the follow-up to the Xbox even the slightest chance of winning the next gen console race?  I've read a few arrogant posts about how the 720 is a "guaranteed winner" and that people just need to eat up whatever crap dish that MS decides to serve them and like it. That's a very dangerous stance for MS to take if it is indeed their attitude with this product release, especially given the global economy and the US in particular are still in recession. A $750 purchase ($500 for the console + another $250 or so for games & accessories) is not one that most  households can make lightly these days with most of the good jobs having been sent to China and India....

rajeevv67
rajeevv67

For gamers , Microsoft do have products like MS Windows Server 2012 , MS SQL server 2012 etc .

sleepnsurf
sleepnsurf

Even amidst all the rumors I have a weird feeling MS will still win next gen.

jcr8
jcr8

The investors are likely in for a big loss if the rumors about the new xbox hold true.

GH05T-666
GH05T-666

surprised it hasnt gone down from all the things they have said about the next xbox..

bloody-hell
bloody-hell

I guess there will be a lot of disappointed investors after their new consoles release then - their share price will be in a freefall soon.

Don't get me wrong, I like Microsoft in general, I make my living off solving their problems, but nobody I talked to (a lot of people due to the IT job) is considering to upgrade to Win8.
It has been tried and tested over longer periods of time, we also tried it in-house since the first release candidates, but it just isn't worth it, everyone is sticking to Win7 for now.

Those into console gaming, even current XBox owners already pretty much made their mind up to switch over to the PS4 instead (or PC), before bending over to annoying DRM and privacy intrusion - While they are aware of the news being unconfirmed rumors for the most part, Microsofts complete silence on the matter isn't helping much.

Even console developers are sick and tired of Microsofts overly restrictive, complicated and overpriced XBox development methods and according to rumors, these won't change either, so even they are more looking at alternatives and seem to be impressed by how Sony is handling it.

It will however only be a small dent in Microsoft's ego and budget, they'll recover and stay with a minor loss of a few hundred million USD, no biggie - I just hope they'll learn from it.
Post-Release will show what was true and what wasn't, I just hope people have enough brains in the meantime to wait and make an informed buying decision instead of just following the hype, only to be disappointed afterwards.

tionmedon
tionmedon

to raise m$ stock price they need 2 buy back x amount of shares..............

HowlPendragon
HowlPendragon

I guess their mission to create the best set-top boxes in the industry will be successful.

Landsharkk
Landsharkk

Oddly I just dropped another $500 on MSFT stocks a couple days ago.  Great longterm investment.


Diamondsoulz
Diamondsoulz

I've been playing around with WIndows 8 for the past 24 hours I must say I had to tweak this thing a lot just to speed it up I watched about a dozen videos just to get it faster =)

It's not bad....I rather have a PC then a x-box and I rather have a Ps3 then a x-box

Branden_Lucero
Branden_Lucero

@mjswooosh 

i'm always online when i'm on Steam. i'm always online when i'm on PlayStation Network. . i'm always online on XBL, i'm always online on the 3DS, i'm always online on my very own piece of sh*t smart phone. i dont see the big deal about this..

mjswooosh
mjswooosh

@sleepnsurf That won't happen if the rumors are true. If the rumors are NOT true...then MS will have a very good chance of winning simply because Xbox Live and the achievement system they have in place is that much better than Sony's online service. Hardware wise, however, the PS4 is mighty impressive. Assuming the 720 hardware is equal, then it really boils down to the rumors. If they are true, MS's sales numbers will be in trouble vs. the PS4 within 6 months of launch. Guaranteed. If the rumors are not true and the 720 hardware is similarly impressive, I'd say MS wins this gen again by a slim margin.

grognard
grognard

@jcr8 Not hardly.  Entitlement internet rage has absolutely no relation to reality.  Diablo 3 and SimCity had phenomenal sales despite all the childish outrage from the dark recesses of internet forums.

Wall Street investors fully understand that the kids posting on forums are not the primary target market.  This third offering will be the culmination of MS' originally stated effort to use the x-box as a Trojan Horse to get into everyone's living room - not just to make a game machine, but to have all your media come through it with MS getting a cut of everything.

deathwish026
deathwish026

@GH05T-666 they havent said anything about there new console yet lol... everyone else has tho.. use ure brain man!

dussan2
dussan2

@GH05T-666  

Windows 7,

Entry into the tablet market

New Xbox 

Nope, MS will be riding this high years.

YoYoma4093
YoYoma4093

@bloody-hell Corporate environments are not going to upgrade over to Windows 8 because it's the norm. Most people I speak to and support tell me Windows 8 is fine and runs better once they grasped the new start menu. You and a few others are playing the arm chair analyst by going off rumors and speculation fed to you by the sensationalist media outlets.  

mjswooosh
mjswooosh

@bloody-hell It sounds like you and I have a similar background and stance on this issue based on vocation and interaction with clients. Certainly, it's "only anecdotal evidence"...but not a single person (or even corporate buyer/lackey) I've spoken with since Win8's release has really wanted to upgrade. I have had quite a few request services to go back to Win7. Re: the next-gen console race, similar findings: anecdotally, the "buzz" re: MS's potential negatives are not good and 100% of the people I've spoken/blogged/tweeted with about this issue in relation to work have indicated they fully intend to support Sony's offering instead if the always-on and/or anti-used game requirements are put into effect by MS on the 720.

MS may view the potential monetary loss and negative buzz as acceptable in the sense that their long-term idea is to make this console a trojan-horse into as many households as possible. But, the idea of giving the market what it neither needs nor wants and then charging for it doesn't usually work out too well. Witness Win8, which despite the BS numbers cited in this PR article has been a complete disaster from a consumer standpoint. If not for laptop pack-ins (essentially, "forced" upgrades), the actual sales numbers would be embarrassingly bad. Win8 is Millennium 2.0. It remains to be seen if they are dumb enough to repeat the same mistakes with the 720.

guitarist1980
guitarist1980

@bloody-hell not me I want to see explosions and bullets flying through my living room. Illumi room is a game changer imo. No offense dude but we don't even know what Microsoft is going to announce and your already calling it a failure. Are you a palm reader?

dussan2
dussan2

@bloody-hell  

Gamer/IT proffesional here.  worked in gaming industry for a bit as a tester/tech support too.  

Windows 8 is a fucking mess and my company is looking at moving to it ONLY if we are forced too by Microsoft.  Windows 7 is a goddamn dream.  Stable.  Easy.  No freaking memory leaks.  Migration from XP to Win 7 was a no brainer.  Moving to Windows 8, not likely.


Overlord93
Overlord93

@bloody-hell

Yeah, because a games console is going to damage the stocks of a company who runs almost a complete monopoly on business software and operating systems. 

But what about people moving to PC?  That's going to really hurt Microsoft isn't it, their stocks will really take a hit after all the gamers move to the only operating system that has a working game library.

daabulls23
daabulls23

@bloody-hell It will go down, but I doubt for a free fall. Maybe back around the $25 range.

jtthegame316
jtthegame316

@bloody-hell If you have made you mind to switch over a rumour rather than facts then thats not really a smart move. i am waiting to see what they say on the 21st may and making my decision based on facts and games.

colt_a
colt_a

@steelmouth News Flash, Bill Gates hasn't been head of the company for awhile now.

mjswooosh
mjswooosh

@Landsharkk Long-term yes. But, you may want to keep your trader on speed-dial to short these stocks soon. If the always-on/used games limitations are real and not just rumors, the sales numbers will be hurt after initial mad rush is over and reality/negative buzz settles in.

obsequies
obsequies

@blackace yeah if it was microsoft execs they'd keep the bonus and screw over whoever they could. The Japanese actually have values. As little as it seems to not accept such an outrageous bonus I really can't see any americans at ms doing the same. 

obsequies
obsequies

@Diamondsoulz windows 8 runs hardware a bit hotter than 7 too if your into overclocking it something to take note on.

mjswooosh
mjswooosh

@Branden_Lucero So what? You are ONE person. Are you so arrogant you believe your living and economic circumstance extends to the other, oh, 7 BILLION or so people on this planet? 

There are TENS OF MILLIONS OF AMERICANS (and other nationalities around the world) who are NOT "always online" for various geographic and financial reasons who would be 100% unable to purchase the 720 if the "always-online" rumor is true. 

How this FACT doesn't immediately smack you upside the head as a completely retarded business maneuver is beyond me. Can you possibly be as insular as Microsoft Execs seem to be? I guess MS doesn't have a corner on the market of living in a bubble.

jcr8
jcr8

@grognard @jcr8 Not really sure if you understand what entitlement really means. People voicing their opinion regarding a products features, stating that they will not be buying it is not an example of entitlement. The reason the previous x-boxes succeeded reasonably well was because of their focus on gaming as well as other things like the xbox 360 getting a huge jump on the ps3, being cheaper etc. It really boils down to what people want. I don´t think people want another way to connect to facebook and twitter, or go online for that matter. They already have a dozen other appliances that do this, and likely do this better than the next xbox. What wall street investors understand is can be debated. It might well be that they know the stocks are going to boom in the weeks leading up to the announcement and release and are looking to take advantage of that. It doesn´t mean that most of them will not be all out on or right after release day.

dussan2
dussan2

@grognard @jcr8 Grognar is right.  

You are nuts if you think the Always Online thing will stop the system from selling out.  

The real question is will the PS4 sell more, will developers and publishers support it more than the Xbox 360?  That is what will determine that factor.  Also when the original Xbox got trounced by the PS2, MS stock didn't suffer too much.  Games is only one part of Microsoft.

Hurvl
Hurvl

@grognard Yes, we the self-entitled hardcore gamers and nerds are in a clear minority against all other consumers that buy games. Our arrogance, though, makes it impossible for us to acknowledge that fact. Whether other people are sheep or not doesn't matter, the end results are the same and there is little we can do about it. 

Personally, I do what I can to help bring about the games I want to play, by buying the games I want to play. That's all any one gamer can do.

mjswooosh
mjswooosh

@guitarist1980 @bloody-hell Kinect is mostly a gimmick and is fun for about 5 minutes on most games. Nearly every game made specifically for Kinect is absolute garbage. Is there any reason you think illumiroom will be different?

bloody-hell
bloody-hell

@guitarist1980 Palm reading is a gypsies thing, no, I have my USB attached crystal ball right here.

Jokes aside (though I do actually have a USB attached crystal ball for real), if this illumi-room gimmick is a must-have for you, then by all means buy it - who am I to talk you out of it, I don't even know you, friendly internet stranger.

Personally I think it's a pointless, catchy gimmick that's fun for a few minutes but only annoying afterwards, but to each his own.
If at all, then I'd just buy a projector and use the entire white living room wall as a "full-screen" projection surface instead.

Just be wary about the difference between marketing hype and reality - While illumi-room may look nice in the announcement trailer which was most likely a detailed, staged, perfect setup under optimal conditions and some post-production video manipulation, reality will most likely be very different, maybe even unsatisfying or entirely worthless.

bloody-hell
bloody-hell

@dussan2 Gamer / IT bro high five.

Windows 7 is supported until 2020, so there's enough time for them to come up with a worthy, useful successor.
If they don't, either we switch over to Linux (but depending on software requirements may not be an option for other companies) or we shift all the office applications to the servers (Citrix XenApp as an example) and switch the clients over to thin-clients with a lightweight embedded linux OS with the sole purpose to connect to Citrix for application access. (about 200 already satisfied clients tell me it wouldn't be a problem for the remaining 700-ish)

Third possibility is to keep using Windows 7 and "neglect" security by not getting any new updates or consider Windows 9 which may very well be out by then anyways.

I'm absolutely not worried from my business side of things and as far as private usage goes, I'll stick to Win 7 until Win 9 may be a satisfying alternative or Linux gaming kicks off.

mjswooosh
mjswooosh

@Overlord93 MS's OS business is not nearly the cash-cow it used to be. MS is trying to expand into other areas because they know that the days of making money off the OS are numbered. Win8's actual consumer sales numbers have been a disaster. The numbers quoted in this article and released by MS to blunt investor worries (and artificially pump up the stock price) are based on corporate/laptop pack-in sales.

bloody-hell
bloody-hell

@Overlord93 Think about it this way - the stock price may be higher now because Microsoft is pushing the console side of things because at the moment it may seem to be something that has potential, but is unrelated to their OS / software market, hence when the console flops, the stock value takes a hit again - and it doesn't matter if people migrate over to PC or not as it may not be what stock traders are speculating on at the moment.

Sure, "freefall" may be a bit of exaggeration, because it'll likely just drop down to the value it was before, at most.

Not saying it does flop, not even saying the rumors are true, we'll see after release though.

bloody-hell
bloody-hell

@jtthegame316 I'm a 100% PC gamer and don't care much about either console - attaching a controller to my PC and playing games on the large TV from the couch if I'm in the mood is my "console gaming".

I meant to say all the people I talked with are aware of the "news" so far being rumors, but are pretty sure to switch over to PS4 or PC if they hold true on release, not that they made their final decision based on rumors yet.

steelmouth
steelmouth

@colt_a @steelmouth History Flash, Bill have plenty shares in MS so working there or not he gets paid in every cent MS makes

grognard
grognard

@obsequies @blackace American companies like MS don't need to do this because MS' war chest has never been under $40 Billion (that's cash on hand for anything they decide to try in addition to profits).  If you're using Sony as an example of Japanese honor that would mean screwing over your shareholders in the name of insular executives who refuse to make changes to address a shifting global market - that's hardly honorable; just foolish.

Geminon
Geminon

@obsequies @Diamondsoulz 

both lies. windows 8 has faster response times than windows 7, faster boot times than windows 7, and handles hardware better than windows 7

no tweaking necessary. if you do, sounds like you have shitty hardware.

YoYoma4093
YoYoma4093

@mjswooosh It's beyond you because you are unaware of the irony of your own statement. You yourself are one person. It's already been addressed that the "always online" isn't required to play. Stop regurgitating everything you read on the net and make your own informed opinion. People buy consoles for a reason. Sorry, but don't try to speak for me and everyone else.

mjswooosh
mjswooosh

@grognard I used to work for a rather large and prestigious investment firm before I regained access to my soul and believe you me the so-called self-titled "Masters of the Universe" at even the cream of the crop Wall-Street firms are more wrong than they are right the vast majority of the time. Basing an argument on anything that an "analyst" (or, especially, a "trader") says is about as trust-worthy as trying to predict the weather farther out than about a week. Most of the best players are only right not by skill but by rigging the game via endless traunches of cash shoveled at Congressmen thru lobbyist lackeys. Alas, that's another discussion, so I digress....

The bottom line is this: no one at this point can accurately predict how the next gen is going to shape up. But, discounting the demands/needs/desires of the MARKET (collective psyche of the consumer mind en masse) is almost always to the detriment of the company doing so. Trying to force-feed a square peg into a round hole will not work. More to the point: people are more sophisticated consumers these days, or perhaps its better to say they are not just "consumers", regardless of what the ditto-heads on Wall-Street think. People have varied desires, demands, and standards regarding the functionality of their high-tech appliances and toys in that they need to meet certain technological, status, and emotional needs. When products fail on any of those fronts they don't sell well long term.  You can believe all you want that the "always-on" requirement and/or trying to eliminate used games possibilities won't effect sales relative to their biggest competitor (Sony)...but then you would need to wake up if you want to face reality. The NextBox's sales will no doubt be fairly strong initially, or at least as strong as can be expected given the fact we are still in a Great Recession. The question is, how well will those sales hold up week-after-week under the negative buzz that will be circulating rapidly about the aforementioned negative aspects of the console if MS chooses to ignore what people want. From what I'm hearing (not "nerd buzz"...just "normal people buzz") most people don't want a $500 console that is an useful as a brick without a $50 a month internet connection to make it functional. And most people equally as strongly don't seem to like the idea of a console that eliminates the ability to buy cheap, used games.

Only time will tell if those 2 factors will hurt their sales in relation to Sony. But, if I were a betting man I wouldn't bet against the market on this one.... 

grognard
grognard

@jcr8 @grognard Oh, I understand and recognize entitlement perfectly well.  A company selling a $60 game has no responsibility to give each and every potential buyer everything they personally think the game should be, customized towards their own tastes, rather than what it actually is.  Adults understand that $60 will only get you so much in this world and adjust our expectations accordingly.

We're not just talking facebook and twitter - the next x-box will be the box you use to get all your tv/movies/games/Music/DVR/Apps/etc on in your living room and the functionality will be integrated seamlessly between them.  MS is a software company and this is what they've been shooting towards for years and this is the reason they had to re-tool Live a few years back (ending support for Halo 2 was the only noticeable change to present users) to get ready for this upcoming generation.

Nintendo still isn't even sure what online means and Sony's PS4 only catches up to what Live offered nearly 7 years ago as they are a hardware company, not software, as evidenced by how clunky their software/OS has always been. 

The box doesn't matter, the software/services does and MS understands what this means in terms of being online for everything to integrate together properly.  They'll win the US and UK again next gen and likely make decent inroads into the rest of Europe and smaller territories, but not in the insular Japanese game market.

mjswooosh
mjswooosh

@bloody-hell @dussan2 By now I think the pattern is pretty well-known...basically every other MS OS release is a steaming turd cash-in to be avoided at all costs. I'm fairly certain Win9 will be worth buying. Until then, stick with 7.

XxAK47xX
XxAK47xX

@steelmouth @colt_a REPLY FLASH!

Zloth2
Zloth2

@MjnE @Geminon @Fulminatory @blackace Visual Studio 2012 is pretty good except for the icons having no color anymore.  Lync seems to be working out pretty well, too, at least for us.

obsequies
obsequies

@grognard @obsequies @blackace your completely right, windows 8 was a genius idea. way to keep up with the shifting global market ms. A bunch of kids coding linux distros do a better job lol

mjswooosh
mjswooosh

@Geminon @obsequies @Diamondsoulz It requires tweaking to get it to look/run "like Win7". Out of box, it is a bit faster/more efficient in terms of raw FPS in games. Overall snappiness to the human eye is rougly the same as Win7. 

That's not the problem, however. The problem is an interface that is not useful or practical without a touch-screen monitor. 

Win9 will be great because by then more people will have touch-screen LCDs on their desktops. For most users right now, Win8 is superfluous at best...and annoying/force-fed at worst. It feels sort of pointless to most consumers who neither want nor need an OS that has tried to ham-fist a touch-screen layer over the mouse-driven interface underneath. With a mouse it just feels klunky, slow, and pointless...and it takes users further from the "metal" yet again. Those who want to play with touch-screen toys have iPads and Android tablets which do this sort of thing much better. And tech-heads want no part of this silliness.

That's why Win8 is a consumer fail, no matter how many fake press releases MS gets tech/gaming sites to run for them about their "wonderful sales numbers".