Sony Group Corporation
SONY
is planning to continue the production of its last-generation console, PlayStation 4 (PS4), throughout 2022,
according to a report from Bloomberg
. Previously, Sony had plans to shelve PS4 production by 2021 but the company never had disclosed the plans officially, added the report.
Bloomberg also added that a Sony spokesperson confirmed that the company was maintaining PS4 production this year.
Citing sources acquainted with the matter, Bloomberg reported that Sony conveyed to its assembly partners late last year that it would go on producing PS4 in 2022 to alleviate pressure on PlayStation 5 (PS5) production. PS5 production has been troubled for quite some time due to pandemic-triggered global supply-chain disruptions.
Sony launched PS5 in November 2020. The latest console was an instant hit with gamers and reportedly more than 10 million units have been sold since then. PS5
boasts
a powerful 8-core AMD Zen 2 processor, 10.3 teraflops of graphics power and impressive 4K visuals, thereby providing an enhanced end-user experience.
Sony Corporation Price and Consensus
Compared with PS5, the last-generation PS4 console uses older-generation chips and therefore are relatively lower priced, making them attractive to gamers. Further, citing sources, the report added that by increasing PS4 supply, Sony is looking to retain gamers within the PlayStation ecosystem as PS5 production faces unexpected challenges.
PS4 remains Sony’s most popular console, with the company having sold nearly 116 million units.
Sony’s Gaming Division to Drive the Top Line
Strong uptake of cloud gaming has emerged as a majotr growth driver for the gaming market. Higher proliferation of smartphones and the adoption of advanced technologies like augmented/virtual reality for next-generation video games along with rapid 5G deployment will act as catalysts driving the gaming market.
Further, acceleration in gaming activity worldwide has been triggered by the COVID-19 crisis and ensuing on/off shelter-in-place restrictions.
Sony’s Game & Network Services (G&NS) segment is one of the leading growth drivers of the company’s top line. In the last reported quarter, G&NS sales jumped 27.4% year over year to ¥645.4 billion, driven by a rise in sales of hardware, a positive impact of foreign exchange rates and an increase in sales of non-first-party titles. The segment’s operating income was ¥82.7 billion compared with ¥105.4 billion in the prior-year quarter.
The company is also focusing on expanding its gaming business through an inorganic growth strategy. Last year, the company
acquired
game developer, Bluepoint Games, a game development studio, Housemarque, a PC-port specialist, Nixxes and the U.K.-based developer, Firesprite to bolster its market share in the lucrative gaming software business.
Zacks Rank & Other Stocks to Consider
At present, Sony carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the broader technology sector include
Salesforce
CRM
,
Hewlett Packard
HPE
and
Microsoft
MSFT
. While Salesforce and Hewlett Packard sport a Zacks Rank #1 (Strong Buy), Microsoft carries a Zacks Rank #2. You can see
the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Salesforce’s fiscal 2022 earnings is pegged at $4.68 per share, up 6.4% in the past 60 days. The long-term earnings growth rate of the company is pegged at 16.8%.
Salesforce’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, the average surprise being 44.2%. Shares of CRM have increased 7.6% in the past year.
The Zacks Consensus Estimate for Hewlett Packard’s fiscal 2022 earnings is pegged at $2.03 per share, unchanged in the past 60 days. The long-term earnings growth rate of the company is pegged at 5.8%.
Hewlett Packard’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 14.4%. Shares of HPE have rallied 40% in the past year.
The Zacks Consensus Estimate for Microsoft’s fiscal 2022 earnings is pegged at $9.13 per share. The long-term earnings growth rate of the company is pegged at 12%.
Microsoft’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 14.8%. Shares of MSFT have surged 45.6% in the past year.
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