Sony Corporation 's SNE arguably biggest growth driver - The PlayStation4 console - is going strong even after three years of release, as evidenced by Sony's numbers. The consumer electronics giant announced that it has sold over 60.4 million units of the console till date.
Sony's PS4 sales numbers are more than double of rival Microsoft Corp.'s MSFT Xbox One console, and quadruple of Nintendo Co.'s NTDOY Wii U console. Thus, PS4 emerges as the clear leader in the current generation of video game consoles.
Sony's figures came in tandem with Microsoft's announcement of the Xbox One X launch this November. The holiday season may see a worthy battle between Microsoft and Sony, as Sony's PS4 platform is still in its prime, while Microsoft claims that the new Xbox is "the world's most powerful console."
Sony's PlayStation ecosystem boasts over 70 million monthly active users across the world, as of the end of Mar 2017. Additionally, PlayStationPlus has roughly 26.4 million paid subscribers as of the end of Mar 2017.
Further, Sony revealed that PS4 software sales are robust, with over 487.8 million copies sold at retail and through digital downloads. Critically acclaimed titles such as "Horizon: Zero Dawn" were primary growth drivers for the impressive sales performance.
Recently, it announced a plethora of new games, both traditional and in virtual reality, for PS4. These include first-party games, including new editions in its "Shadow of Colossus" and "God of War" game franchises, which are exclusive to PS4.
Coming to Virtual reality ("VR"), Sony is gearing up to capitalize on the burgeoning new field in the gaming world. Sony has reportedly already sold 1 million PS VR headsets to date. The company recently showcased a role-playing VR game dubbed "Skyrim" and a virtual reality fishing simulator game called "Final Fantasy: Monster of The Deep."
Sony's CEO - Kazuo Hirai - is optimistic about its strong gaming and semiconductor businesses, and recently announced that he expects the company's operating profit to reach ¥500 billion ($4.5 billion at current exchange rates) in the fiscal year ending Mar 2018. This is a level that the company hasn't achieved in over two decades.
Encouragingly, the company started fiscal 2017 on a decent note, having gained 31.8% year to date - ahead of the Zacks categorized Audio/Video Home Products industry's average gain of 28%.
Moving forward, Hirai asserted that his goal is to maintain robust profitability in the years to come, and he has already implemented major restructuring. Sony has been offloading its assets to ensure profitability, including the Vaio personal computer business. The company plans to promote innovation in its consumer electronic business, while investing in fields like healthcare, artificial intelligence, virtual reality and robotics.
Sony's problems have arguably stemmed from operating in so many diverse areas, which made it difficult for the company to do well across the board. Its lucrative chip business, which produces images sensors for mobile devices, was disrupted last year due to a series of earthquakes that hit Kumamoto.
However, this Zacks Rank #3 (Hold) company has created an impressive ecosystem of the PlayStation family - and its restructuring efforts will help generate sustainable profit, thus driving future growth.
Sony Corp Ord Price and Consensus
Stocks to Consider
A better-ranked stock in the broader sector is Ubiquiti Networks, Inc. UBNT carrying a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Ubiquiti Networks has a solid earnings surprise history for the trailing four quarters, having beaten estimates thrice, for an average beat of 13.3%.
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