Software developer Microsoft Corporation’s (MSFT) Xbox Live was hit by user connection problems on Christmas Day. Xbox was partially inaccessible to users as they were unable to connect with the gaming network.
Sony Corp's (SNE) PlayStation Networks also suffered from a similar problem. Both the companies acknowledged that their gaming networks had access issues.
A hacking group called Lizard Squad has been claiming responsibility for both outages on Twitter (TWTR).
Per reports Lizard Squad has been attacking Microsoft's Xbox Live and Sony's PlayStation Network separately over the past few days. The hacker group had also threatened to cause havoc on Christmas day.
This network failure ruined the holiday for millions of gamers, reflecting the dependency of people on their gaming consoles for entertainment.
Microsoft generates a major portion of revenues from its Computing and Gaming Hardware, which includes the Xbox and Surface platforms. Microsoft reported encouraging first quarter 2015 revenues of $23.20 billion, up 0.8% sequentially and 25.2% from last year. Revenues also beat the Zacks Consensus Estimate of $21.59 billion.
Revenues from Computing and Gaming Hardware, which includes the Xbox and Surface platforms jumped 70.2% sequentially and 65.2% year over year to $2.45 billion, significantly higher than the guided range of $1.7 billion to $2.0 billion.
There was marked progress on the gaming side, where the company sold 2.4 million Xbox consoles during the quarter, driving platform revenues up 58%. Xbox LIVE apps grew more than 20%. Xbox One was also made available in 28 markets and the initial sales in the channel in China helped results in the last quarter.
The glitch however is not great news for the software developer as this negatively affected user experience. Further instances of such glitches may lead to customer loss. Therefore, Microsoft needs to focus on protecting its gaming network from hackers through continued innovation and security improvements.
Microsoft currently has a Zacks Rank #3 (Hold). Advent Software, Inc. (ADVS), sporting a Zacks Rank #1 (Strong Buy) is a better-ranked stock from the same sector and therefore worth considering.
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