Is Microsoft (MSFT) Planning to Add Features to Windows 10?

Microsoft Corp MSFT is reportedly expanding Windows 10 features as recently noted by Windows Insiders. The company is apparently bringing a “Game Mode” to Windows 10. According to Forbes, which quoted Twitter TWTR user WalkingCat (@h0x0d), a newer version of the operating system will include a file called – gamemode.dll – that possibly facilitates pc gaming.

Per Forbes the existence of the .dll file suggests “some sort of performance-enhancing mode. This could allocate more resources to games and lower priority for non-gaming tasks to boost performance”.

The newer version of Windows 10 is currently available to Windows Insider Program users. Per Business Insider “The Insiders programme was created in early 2015 as a way of engaging with Windows users – especially hardcore users – and finding out what, exactly, they wanted to see in the operating system.”

Game Mode to Boost Windows 10 Adoption

We believe that the “Game Mode” feature is particularly encouraging for pc gamers. According to latest data from PwC, PC gaming is expected to grow at a CAGR of 6.3% per year (from 2015) through 2020, much faster than overall video game industry growth estimate of 3.6%.

Moreover, according to PwC, pc game sales are anticipated to reach $29 billion globally, compared with $28 billion in sales for the console market by the end of 2016. The rebound is particularly driven by games like League of Legends, increasing digital purchases and growing digital add-on content.

We note that in first-quarter fiscal 2017, Microsoft witnessed more than 20 billion hours of gameplay on Windows 10 PCs and tablets, which is a jump almost 500% on a year-over-year basis. Further, the availability of a dedicated game mode will boost attraction of the operating system for avid gamers, which will eventually drive adoption, in our view.

BSOD to be Replaced by GSOD

Meanwhile, Windows enthusiasts have also noted a color change in Microsoft’s infamous Blue Screen of Death (BSOD) in Windows 10. The company is reportedly replacing the Blue color with Green for previewers. The change in color scheme was recently noted in a leaked preview build of Windows 10 (build 14997), as reported by The Verge.

According to Microsoft employee Matthijs Hoekstra the color change will help Microsoft to easily “distinguish between Production and Insider releases.” The color change will help the company in providing support to customers as they will easily be able to determine if a user is running an insider release or a production build.

Microsoft Set to Outperform in 2017

Microsoft shares generated a positive return of 13.37%, outperforming the broader Zacks Computer Software industry which has witnessed a gain of 10.44%, in the last one year.

We believe that Microsoft is well positioned to outperform the broader market in 2017 driven by its enterprise strength, continuing benefits from the Office 365 subscription model, strong growth prospects of Azure and promising new products like Surface and HoloLens.

Moreover, the completion of the LinkedIn acquisition is expected to boost Microsoft's presence in the social media market. Further, the deal strengthens its enterprise business.

Additionally, Microsoft’s alliance with technology bigwigs such as Intel INTC and Qualcomm QCOM to develop the next generation of desktops that are more secure and support mixed-reality for enhanced gaming and mobile experiences is a prudent move, which will drive top-line growth going ahead.

Zacks Rank

Microsoft currently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

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