Way back in August, word emerged that tech giant Microsoft (MSFT) planned to phase out volume pricing for online services. And now, with November 1 imminent, that phasing out is about to kick in. But the move, designed to create “…greater transparency and alignment across all purchasing channels,” is not dampening investor enthusiasm. In fact, Microsoft shares are up nearly 1.5% as a result, in Monday afternoon’s trading.
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Microsoft had already been spotted paring back its bulk discounts for things like Azure, as well as some other products. But this move helps flatten the pricing structure even further. The down side, however, is that some former bulk buyers will see prices increase by as much as 13% over previous levels, reports noted. That could represent millions of dollars in extra, unexpected spending.
Word from Codestone Group’s head of solutions, Tony Mackelworth, is that Microsoft’s move away from volume pricing is a demonstration of “…an increasing reliance on subscription-based pricing.” This was also demonstrated by the rising tide of Copilot deployments as well as improved security features in Defender, Mackelworth noted.
The Big New Xbox
While there has been a lot of discussion in the past over whether or not Microsoft would even stay in the console race, new reports suggest that it plans to carry on in a big way. In fact, a recent summary of features suggests that the next Xbox will be an extremely ambitious platform, even as prices may be a lot higher than normal.
Basically, the next Xbox will be what reports call “…a curated Windows gaming PC, complete with your full native console library.” That means a console that runs “…full-bore Windows, with a TV-optimized, console-style experience layered on top,” reports noted. Essentially, the new Xbox will offer a platform similar to Steam’s Big Picture Mode, that will allow an exit to Windows and competing stores from there. This represents a huge potential influx of new games and a very real potential gain for Microsoft.
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 22.74% rally in its share price over the past year, the average MSFT price target of $627.98 per share implies 22.88% upside potential.
