Comcast Should Take a Second Look at Xbox Collaboration
It looks like Microsoft (NASDAQ:MSFT) may be in talks with Comcast (NASDAQ:CMCSA) and Verizon (NYSE:VZ) to allow subscribers of these services to navigate through pay-TV content using its Xbox gaming console according to recent online reports. This makes sense as a study last year found that the Xbox console is used for non-gaming purposes 40% of the time. Such activities include streaming movies and shows from Netflix (NASDAQ:NFLX), listening to music content on sites such as Last.fm apps, getting involved in social media on Facebook (FBOOK) and Twitter etc.
So what’s the similarity in these non-gaming activities? It is simply access to the Internet.
This has scared cable companies like Comcast in the past as it threatens to replace the cable box. However, there is talk that providers like Comcast and Fios TV could partner with Xbox to deliver its content through the Xbox. The collaboration could improve technology sharing like more targeted advertising, sophisticated programming options and potentially the use of Microsoft technology such as its Kinect.
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When Xbox users spend a significant amount of their time on the web, why not offer them an interactive and attractive way to remain engaged Comcast’s content and service?
Our price estimate for Comcast stands at $27.50 implying a premium of about 25% to the market price.