GameStop shares surge 44% on tie-up with Microsoft to upgrade stores

(Reuters) - GameStop Corp <GME.N> and Microsoft Corp <MSFT.O> have signed a multi-year agreement that will allow the video game retailer to upgrade its business with the software company's cloud and hardware services and increase GameStop shares by 44% increase on Thursday.
GameStop, which already sells Microsoft's flagship Xbox game console, announced that is now a two year old digital version would offer subscription package with the consoles for gamers at no upfront cost.
Several analysts believe the November launch of the XBox Series X and Sony's rival PlayStation 5 will boost sales for GameStop.
According to Brokerage Jefferies, the agreement gives GameStop access to revenue generated at the player level, rather than just the content sold.
GameStop, which did not disclose the financial terms of the business, planned to roll out Microsoft's 365 services and messaging app teams in its stores and to equip store employees with new Surface devices.
The Gamestop share closed 44% and rose 5% in expanded trading. The company announced it will move its back-end and in-store operations to Microsoft's Dynamics 365 platform, which is a range of cloud-based business applications and customer data platforms.
Last month, Ryan Cohen, the largest single investor in GameStop and founder of e-commerce company Chewy, increased his stake in the company to nearly 10% and agreed to do more to get the best results for shareholders .

(Reporting by Ayanti Bera in Bengaluru; editing by Devika Syamnath)

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