New Halo Game Could Be Microsoft's Biggest Ever: Here's How It Helps Shareholders

• Microsoft Corporation MSFT has seen a 16.6 percent increase in its share price year to date, with a high of $54.92 on November 6.
• Piper Jaffray’s Katherine R. Egbert has reiterated an Overweight rating on the company, while raising the price target from $53 to $64.
• Egbert mentioned that Halo 5: Guardians has been the Xbox Store’s best-selling digital title during launch week, with the game generating sales worth $400 million in its first week.

Analyst Katherine Egbert expects the game to “spur additional software and console sales, which come on at a lower overall gross margin.”

With the most successful launch week among all the Halo games, Halo 5: Guardians saw users logging over 21 million hours playing the game.

According to the Piper Jaffray report, “Revenue upside in the December quarter could come from increased Xbox Live subscriptions, full game digital downloads, expansion packs, and micro-transactions.”

However, Egbert cautioned that previous releases of Halo had led to downward pressure on the company’s overall gross margin. “While Halo 5 is unlikely to propel XboxOne into the #1 spot, it should help make up some of the gap and solidify Microsoft's #2 position,” Egbert stated.

Egbert believes that the “resurgence” of Xbox and the Halo franchise indicates Microsoft’s renewed focus on more customer-centric growth.