Hardcore video gamers are gearing up to celebrate one of the holiest days on their calendars -- Nov. 22. That's the day that Microsoft (NASDAQ:MSFT) launches the Xbox 360.
To get into the spirit, Mr. Softy has published a press release detailing its plans for this very important initiative. And don't take the phrase "very important initiative" lightly. The Xbox franchise is the backbone of the company's schematic for long-term shareholder value. The impression that people will take away from the first day (and, to be sure, the first week) of the Xbox 360's existence will be as crucial to the software company as oxygen is to aerobic organisms.
OK, first things first: The headline of the press release, "Strongest Launch in the History of Video Game Consoles," is just a bit on the hyperbolic side. But, truthfully, there is a lot of excitement here, as valuable franchises from ace publishers such as Activision (NASDAQ:ATVI) and Electronic Arts (NASDAQ:ERTS) are about to get the next-generation treatment. Titles including Tony Hawk's American Wasteland, Madden NFL 06, Call of Duty 2, NBA Live 06, and Gun will excite first-day buyers, guaranteed. Plus, Microsoft is teaming up with Bizarre Creations to deliver Project Gotham Racing 3, and a game based on the upcoming King Kong remake will come courtesy of Ubisoft. If that movie hits it big, it could create a lot of buzz for the system. I am aware, however, that software adaptations of movies do not always capture the feel of the celluloid experience, so I'll qualify this point by saying that the game has to actually be good.
Microsoft believes it can move close to 3 million Xbox 360 units through retail channels in the first three months. This goal seems reasonable enough to me, since, on an anecdotal level, I've been feeling the anticipation building. I also think it's reasonable enough to assume that the Xbox 360 is behind the return of Microsoft's stock to the high end of its trading range.
Being near the 52-week high oftentimes spooks investors. But think short-term. Rather, think of the dividend potential of this particular investment. The company brings in the cash, and, like Mathew Emmert, I think it is going to turn into a great income play down the line. Dollar-cost-average this sucker for all it's worth.
To ensure those dividend payouts, Microsoft is getting in on the ground floor of the new console cycle. But Sony (NYSE:SNE) and Nintendo will have their units out before you know it. And that's why Bill Gates hopes he can grab you now and keep you for a long, long time. Gates' lineup does look strong, but we'll see just how strong when the stats pour in.
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Activision and Electronic Arts are Motley Fool Stock Advisor recommendations.
Fool contributor Steven Mallas owns none of the companies mentioned. The Fool has a disclosure policy.
