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E3 2015: What Microsoft Corporation Wants Investors to Know

By Leo Sun – Jun 16, 2015 at 12:40PM

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These are Microsoft’s top announcements from E3 2015.

Microsoft (MSFT -0.04%) recently made some big announcements during E3 2015. The company wisely sidestepped less popular topics like Xbox apps and the Kinect and focused on backwards compatibility, exclusive games, and augmented reality. Let's take a look at the three of the top takeaways from that presentation.

Source: Microsoft.

1. Xbox One updates
The biggest announcement regarding the Xbox One was backwards compatibility for Xbox 360 games. By the end of the year, Microsoft will make the first batch of 100 Xbox 360 titles compatible with Xbox Ones. Previously purchased Xbox 360 games can be downloaded again at no extra charge, and they will work with the Xbox One's broadcasting, screenshot, and game DVR features. By doing so, the Xbox One gets more games, and the move could convince holdout Xbox 360 owners to upgrade. It's also a response to Sony's (SONY 0.84%) cloud gaming service, PS Now, which streams PS3 games to the PS4 for a price.

Microsoft will also let Xbox One owners buy and play unfinished versions of games, which will turn eager gamers into beta testers. Valve has a similar program, Steam Early Access, which boosted sales of lesser-known titles like Dayz and Prison Architect.

2. Exclusive games
One of the Xbox One's weak spots is its lack of exclusive blockbuster games. The three best-selling games for the console -- Activision Blizzard's Call of Duty: Advanced Warfare, Ubisoft's Assassin's Creed: Unity, and Take-Two's Grand Theft Auto V -- are all cross-platform titles.

That could change over the next two years, though. Forza Motorsport 6, the latest entry to Microsoft's popular racing series, will arrive in September. The following month, Halo 5: Guardians will finally arrive. If it does as well as Halo 4, which sold over 9 million copies worldwide, it would likely become the top-selling game on the console. By Christmas, Square Enix's Rise of the Tomb Raider will be released as a time-limited exclusive for the Xbox One.

Halo 5: Guardians. Source: Microsoft.

Looking further ahead, Gears 4, the next chapter in the Gears of War franchise, is expected to arrive in late 2016. The first four games in the series, which were all Xbox 360 exclusives, sold over 20 million copies worldwide. Mega Man creator Keiji Inafune and the creators of Metroid Prime are also developing an Xbox One exclusive known as ReCore, which The Verge describes as a "mash up" between Wall-E and Star Wars.

But it's not just the triple-A games that gamers and investors should focus on. Microsoft also announced a bundle of 30 classic Rare games, including Battletoads and Perfect Dark, in the new $30 Rare Replay collection. Unfortunately, Nintendo-licensed Rare games like Goldeneye and Donkey Kong Country won't be included.

3. HoloLens gaming
A few months ago, Microsoft showcased Minecraft as a tech demo for its HoloLens augmented reality headset. Microsoft did a similar demo during E3, with a player manipulating virtual Minecraft blocks on a coffee table.

Microsoft's HoloLens. Source: Microsoft.

In an interview with The New York Times, Microsoft CEO Satya Nadella admitted that enhancing HoloLens was the main reason the company acquired Minecraft developer Mojang for $2.5 billion. Since then, Microsoft has hired gaming veterans, including Mass Effect director Casey Hudson, to develop new gaming experiences for HoloLens.

Microsoft now plans to launch a special version of Minecraft for the HoloLens when the headset goes on sale. Rumors suggest the HoloLens might be released in July and cost around $1,000, but that's highly doubtful considering the device is still basically a prototype. However, Microsoft stated that it will reveal more details about the HoloLens and AR Minecraft at Minecon next month, so stay tuned.

Microsoft grows up
Microsoft's E3 2015 presentation shows that the company has matured from the days when it tried to make gaming "hip" with cringe-worthy E3 celebrity appearances by Donald Trump, Joe Montana, and Usher.

Over the past two years, Microsoft's presentations have focused more on directly addressing gamer demands. Looking ahead, the potent combination of backwards compatibility, exclusive games, upgrades in storage, price cuts, and Windows 10 integration could all finally help Xbox One gain ground against the PS4.

Leo Sun owns shares of Apple. The Motley Fool recommends Activision Blizzard, Apple, and Take-Two Interactive. The Motley Fool owns shares of Apple. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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