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Microsoft stock price slips lower as Xbox Series X and Xbox Series S are launched

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  • Microsoft launches Xbox Series X at $499.99 and the cheaper version Xbox Series S will retail at $299.99
  • Shares of the tech giant now trade over 4% in the red this week
  • The price action now approaches a first buy zone located between $200 and $210

Microsoft Corp. (NASDAQ: MSFT) launched its two new models of Xbox today in an effort to cash in on the current gaming boom as many are still stuck at home due to the second wave of coronavirus. 

Fundamental analysis: The console race heats up

The new Xbox Series X, which Microsoft calls the most powerful console in the world, will be priced at $499.99, while the cheaper version Xbox Series S will retail at $299.99.

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The Xbox Series S has already started facing criticism for being not as powerful as Series X, which has more storage capacity, and a sophisticated rendering technique called ray tracing, which Series S doesn’t include. 

Xbox’s main competitor, Playstation 5 is set to launch on November 13. PS5 is considered the leader among gaming consoles as it has a broader fan base and a higher number of exclusive games that will be available for sale together with Playstation’s launch. 

Microsoft said Xbox recorded the highest number of preorders ever as it was launched worldwide on the same day for the first time in history. 

The company said the additional stocks will become available upon the rollout as the first supply of preorders sold out rather quickly. 

“There were some early supply chain issues in Q1/Q2 due to Chinese manufacturing plants shutting down due to COVID, but these have since been operating normally again,” said Maurice Klaehne, an analyst at research firm Counterpoint.

Xbox Game Pass, a subscription-based service that offers customers over 100 games, some of which are brand new, is Microsoft’s main tool that allows it to compete with Playstation. The number of Game Pass subscribers rose to over 15 million since its launch.

Technical analysis: Shares slip lower

Microsoft share price joined its tech colleagues in slipping lower on Monday and Tuesday after the breakthrough in the Covid-19 vaccine development sent stay-at-home stocks lower. 

Microsoft stock daily chart (TradingView)

Shares of the tech giant now trade over 4% in the red this week as the price action heads towards the 200-DMA near $210. Starting from this level and extending to $200 is a near-term buy zone for investors aiming to buy MSFT shares

Summary

Microsoft launched its two new versions of Xbox gaming consoles, Xbox Series X and the cheaper model Xbox Series S in a bid to capitalize on the ongoing gaming hype. Still, shares extended lower today amid a wider tech selloff.