This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Response to Microsoft's Xbox One Console Lights Warning Flares

Stocks in this article: MSFT SNE

NEW YORK ( TheStreet) -- Microsoft's (MSFT) main troubles in its traditional businesses have become clear. PC sales could drop by as much as 10% this year and a lackluster response to its Windows 8 operating system has prodded the company to begin work on a new version of the product (to be released later this year).

Where the company has shown consistent strength is in its entertainment division. Its latest release, Xbox 360, managed to overcome major technical issues and offer big processing power with superior online functionality. The unit sold over 75 million units and brought more than 40 million customers to its Xbox Live online gaming service, making it one of the most acclaimed gaming consoles ever.

But Microsoft's top positioning in these sectors is starting to look vulnerable, as the recently announced XBox One has been met with general disappointment in two areas:

Xbox One users must maintain broadband internet connectivity and login at least once every 24 hours in order to play the games they have bought, and game publishers can block users from lending games or giving them away.

In addition, rentals will not be supported when the new unit is launched.

There are also privacy concerns, since large amounts of private data (videos, photos, and even things like recorded facial expressions and heart rate) are uploaded and saved on outside servers.

But what is really putting Microsoft executives on the defensive is that Sony (SNE), its chief industry rival, has said users of its PlayStation 4 console will not face the same restrictions.

At this stage, it is clear that these two companies are focused on owning the living room, with devices that are capable of supporting video chat and premium cable television, in addition to interactive gaming.

The ultimate winner in these areas will be the company that is able to guide the consumer seamlessly into an interconnected, digitally controlled marketplace.

Microsoft's latest policy changes fail to make these transitions in a way that many of its core users do not like, leaving the door open for competitors to take market share from an already vulnerable company.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs