Sony Stock: Is This a Game-Changer for Sony Corp (ADR)?

Sony StockThis Is Pushing Sony Stock Higher in 2016

Microsoft Corporation (NASDAQ:MSFT) shocked investors and gamers when it said it would consider allowing the “Xbox One” multiplayer mode on PCs and “PlayStation 4.” The software giant has launched a special feature to do just that; game developers can now link Xbox Live members with those on other networks, including those using other consoles or PCs.

Sony Corp (ADR) (NYSE:SNE) got the message and responded with a challenge of its own. It will allow the same flexibility on its PlayStation Network. That, combined with the fact that Sony now owns the rights to the Beatles catalogue, sent Sony stock soaring more than five percent. (Source: “Sony responds to Microsoft’s invite to let Xbox gamers play PS4 players,” The Verge, March 16, 2016.)

Since the start of last February, Sony stock has moved up by approximately 20%. However, Microsoft’s announcement could open up the path to much bigger gains for Sony. Certainly, the two companies appear to have established an alliance of sorts. At the very least, they are cooperating, which in itself has always been something unimaginable.

Such is the extent of the Microsoft versus Sony gaming rivalry that the TV show South Park used that theme for one of its best episodes ever in season 17. Investors and gamers must have tripped over their joysticks as they learned that the two bitter rivals would work with developers who want to produce multi-network games. This may lead to future consoles having built-in Xbox One and PlayStation 4 compatibility.


But this move to cooperate with Microsoft wasn’t Sony’s biggest surprise. In San Francisco, Sony president and CEO Andrew House raised what seemed like a defunct project back from the dead. Sony has revived the “Morpheus” virtual reality project first discussed a year ago at the Tokyo Game Show. House’s announcement was to the point: October 2016 and $399.00 (399 euros; 349 British pounds; 44,980 yen). (Source: “PlayStation VR Will Launch in October for $399,” Wired, March 16, 2016.)

The most interesting aspect is undoubtedly the price. Whereas rivals “Oculus Rift” and “HTC Lives” alone cost at least twice as much—not counting the hardware needed to run them—Morpheus will sell for just US$399.00.

Virtual reality is the next big development in the gaming market. Sony will have launched the first salvo at a reasonable price and in time for the 2016 Christmas season. If that hasn’t caused Sony investors to salivate, consider that at the launch of Morpheus, Sony will offer 50 VR games, one of which involves a special collaboration with Lucas Film, featuring a Star Wars theme. (Source: Ibid.)

As for the price, Sony stock benefits from the weak yen, as the company is a heavily export-centric business. (Source: “Sony Should Benefit From Weaker Yen,” The Street, February 8, 2016.) The weaker yen makes several ranges of Sony products more competitive. The race to the bottom approach to interest rates, meanwhile, suggests Sony will benefit for the next few quarters.

Sony also sold more cameras and home entertainment units.

Another area of growth is in the automotive sector. Car sales are increasing worldwide, and so will demand for Sony’s sensors for autonomous driving technology—one of the driving factors of future growth in the auto sector. (Source: Ibid.)

As for smartphones, Sony has a chance to gain market share with its latest “Xperia.” Sony is betting on the future with its dual-lens camera technology. Not only does Sony equip its own products with the lenses, but it also supplies other manufacturers with the lenses, including Apple. (Source: “Sony says dual-lens camera tech launching with ‘major smartphone players’ in next year,Apple Insider, February 3, 2016.)

Even though Sony stock closed at $20.82 in the last trading session, at the bottom of SNE stokc’s 52-week range of $19.90 to $32.95, two Zacks Research analysts have rated it a “Strong Buy.” (Source: “Stocks With Strong Buy Signals: Sony Corp (ADR) (NYSE:SNE), Array Biopharma Inc. (NASDAQ:ARRY), Koninklijke Philips NV (ADR) (NYSE:PHG),” News Oracle, February 10, 2016.)