Microsoft’s venture into the future of streaming could turn it into the “Netflix of Gaming” according to one Wall Street analyst, putting it on the path to becoming a $1 trillion company.
“We see Microsoft building out the ‘Netflix of Gaming,'” Morgan Stanley analyst Keith Weiss wrote in a note to clients. “We think that gaming has historically been largely ignored, misunderstood, and undervalued by analysts and investors.
“With the gaming ecosystem expanding from the console to the PC and Mobile device, a shift from hardware and one-time video game sales to subscription services, and a future which includes streaming, broadcasting, and mixed-reality, we see Microsoft well positioned for the future of Gaming.”
Weiss believes that a mixture of recurring revenue thanks to software and services could “support a path to $50 billion in earnings-before-interest-and-tax and a $1 trillion market cap for Microsoft” by the year 2021.
Microsoft’s potential was also noted by Jefferies analyst Timothy O’Shea, who specifically mentioned the company’s cloud-based streaming plans.
“Google, Amazon and Microsoft are all working on cloud-based, streaming video game platforms designed to compete with PlayStation and Xbox, and these could launch before the end of the decade,” said O’Shea. “These services would expand the addressable market by at least 4x and would be available on all screens including TVs, laptops, tablets and smartphones.”
Recently, though he didn’t mention Microsoft, Ubisoft CEO Yves Guillemot said in an interview that the next generation of consoles could be the last before everyone streams games. While internet speeds are certainly a factor holding this back from becoming reality, Microsoft is a step ahead with its Azure cloud service.
Via: Business Insider