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A First Look Into E3 '16: 'Publishers Emerging As Winners'

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A First Look Into E3 '16: 'Publishers Emerging As Winners'

Oppenheimer said "publishers are emerging as winners" at this year's Electronic Entertainment Expo (E3).

It's day 3 of the event, and the research firm has come out with a note stating the strategy of Microsoft Corporation (NASDAQ: MSFT) to make Xbox Live a social platform and offering game play across PC and console is good for the industry.

"We see this move as a way to lower barriers for gamers and to make it easier for them to have a customized experience," analyst Andrew Uerkwitz wrote in a note.

The analyst highlighted that Microsoft, for the first time, announced two new consoles: the Slim and Project Scorpio.

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"We believe the gaming industry is growing such that it can now support a good, better, best hardware model. We see this broadening the market and bringing more consumers to the game space — backward capability further helps," Uerkwitz noted.

In addition, Uerkwitz said all companies he met discussed the opportunities to engage with gamers beyond the initial purchase; ideally, these engagements would provide monetization opportunities, perhaps including expansion packs, virtual currencies, level-ups and companion apps.

"We don't view this as a one-sided transaction — we believe the return for gamers is a more immersive, personalized experience," Uerkwitz elaborated.

Further, the analyst wants KPI (key performance indicator) to shift away from downloads/units sold to number of regular players as continued cross-platform integrations would make little difference between console/PC/mobile over the long term.

"There seemed to be more buzz this year than in years past despite the current mid-cycle positioning. We may look back at this year and realize it was the turning point for both hardware makers and video game publishers alike," Uerkwitz concluded.

Latest Ratings for MSFT

DateFirmActionFromTo
Jul 2019MaintainsOutperform
Jul 2019MaintainsNeutral
Jul 2019MaintainsBuy

View More Analyst Ratings for MSFT
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