GameStop Corp GME announced a new multi-year partnership with Microsoft Corporation MSFT.

What Happened: The deal will include GameStop using back-end and in-store solutions from Microsoft to help with finance, inventory, e-commerce, retail, and point-of-sale.

The partnership will help associates see insights about customer preferences and see inventory and promotions in real-time. Associates will use new Microsoft Surface devices.

GameStop will roll out Microsoft 365 and Teams to its stores to help connect its more than 30,000 associates in productivity and collaborations.

GameStop will be able to offer Xbox All Access, a plan that includes the Xbox console and 24 months of Xbox Game Pass Ultimate for no up-front cost.

Why It’s Important: The console wars heat up in November with the release of Microsoft's Xbox Series S and Serie X and the Playstation 5 from Sony Corporation SNE.

GameStop’s ability to sell the Game Pass Ultimate allows it to gain customers and split the lifetime revenue value of the deal with Microsoft.

Analysts have been mixed on how big of an impact the consoles will have for GameStop and how long a physical-based games retailer can survive.

Jefferies upgraded shares to Buy based on the upcoming new consoles.

Credit Suisse has an Underperform rating and a $3.50 price target saying liquidity efforts are not enough to save the company.

Benchmark has a Sell rating and $3 price target citing the growth in digital sales and both new consoles having version with no disc drives.

GME Price Action: Shares of GameStop are up 32% to $12.39. Shares are up 186% over the last six months.