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Sony (SNE) Unveils Dual Versions of Upgraded PS4 Console
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In a bid to continue dominating living rooms, Sony Corporation launched two new versions of its market-leading PlayStation 4 video game console as it strives to maintain its sales lead over Microsoft Corporation (MSFT - Free Report) and Nintendo Co. Ltd. (NTDOY - Free Report) . Sony also declared its plans to release a more powerful version of the flagship machine this fall, well ahead of similar plans of its rivals next year.
Two Fresh Versions of the Old PS4
The new high-end console, formerly codenamed “Neo” but known as “PlayStation 4 Pro” now, is an upgraded version of the three-year-old PS4 hardware. The new console boasts a more powerful central and graphics processing chip along with enhanced image-processing capability. Further, it will also offer additional storage and will support 4K resolution.
Most importantly, the console is optimized for Sony's upcoming PlayStation VR virtual reality headset. The PS4 Pro will be made available on Nov 10, and will cost $399.
Sony also unveiled a lighter, slimmer, more energy-efficient PS4 toreplace the original fourth-generation PlayStation machine, which debuted in Nov 2013, at a price of $399. The fresh version will hit the market next week and will be available for $299.
Sony has upgraded a few of its own games to leverage the more powerful machines. Further, Activision Blizzard Inc. and Entertainment Arts Inc. demonstrated upgraded versions of their games that incorporate these advanced features.
The Gaming Consoles Rivalry
Considering that after PlayStation 3, Sony let 7 years pass before releasing PS4 with major enhancements, the PS4 Pro is a major departure from tradition. In fact, Microsoft and Nintendo have followed the same trend.
But times are changing, and to contend with the fast-evolving technology domain and intensifying competition from PCs, smartphones and the like, all three companies are now launching new hardware more frequently.
In fact, Sony’s step follows a mid-cycle hardware update by rival Microsoft, which brought the Xbox One S to market last month. The Xbox One S is a smaller, more powered-up version of the original, and its pricing starts at $299. Microsoft also announced plans for a bigger update, currently referred to as “Project Scorpio”, slated to go to market late next year.
If we compare the two players, Sony is hands-down beating its chief rival. It has sold 43.4 million PS4 consoles across the world, eclipsing the 22.3 million that Xbox One achieved, per industry website VGChartz.
Sony’s Gaming & VR Strategy
Sony continues to tout its games business to be its biggest growth driver, encouraged by robust console sales, an increase in subscribers to its PlayStation network and the prospects of its virtual reality (VR) headset. In the fiscal year ending Mar 2017, the company anticipates its gaming business to generate about 45% of its overall operating profit, and estimates selling about 20 million PS4s in that period.
Sony’s PS4 upgrade might be a strategy to dominate the VR space. Sony will launch its VR headset in October and the games call for a greater processing power compared to those which use standard television displays. The new consoles will enable buyers to connect them directly to the company’s VR headset, which is slated to go commercial this October.
However, Sony has been recently facing pressure owing to weaknesses in number of its businesses, namely, mobile and sensor which are expected to hurt its financials in the near term. Factors like cutthroat competition and weakness in cameras and image sensor business add to the company’s challenges. Also, the Kumamoto earthquakes have significantly aggravated problems for this Zacks Rank #3 (Hold) company by affecting its Devices segment and IPS segments heavily.
Going forward, we expect Sony to continue shifting gears in its growth plans, reflecting changing trends of the fast-evolving industry.
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Sony (SNE) Unveils Dual Versions of Upgraded PS4 Console
In a bid to continue dominating living rooms, Sony Corporation launched two new versions of its market-leading PlayStation 4 video game console as it strives to maintain its sales lead over Microsoft Corporation (MSFT - Free Report) and Nintendo Co. Ltd. (NTDOY - Free Report) . Sony also declared its plans to release a more powerful version of the flagship machine this fall, well ahead of similar plans of its rivals next year.
Two Fresh Versions of the Old PS4
The new high-end console, formerly codenamed “Neo” but known as “PlayStation 4 Pro” now, is an upgraded version of the three-year-old PS4 hardware. The new console boasts a more powerful central and graphics processing chip along with enhanced image-processing capability. Further, it will also offer additional storage and will support 4K resolution.
Most importantly, the console is optimized for Sony's upcoming PlayStation VR virtual reality headset. The PS4 Pro will be made available on Nov 10, and will cost $399.
Sony also unveiled a lighter, slimmer, more energy-efficient PS4 toreplace the original fourth-generation PlayStation machine, which debuted in Nov 2013, at a price of $399. The fresh version will hit the market next week and will be available for $299.
Sony has upgraded a few of its own games to leverage the more powerful machines. Further, Activision Blizzard Inc. and Entertainment Arts Inc. demonstrated upgraded versions of their games that incorporate these advanced features.
The Gaming Consoles Rivalry
Considering that after PlayStation 3, Sony let 7 years pass before releasing PS4 with major enhancements, the PS4 Pro is a major departure from tradition. In fact, Microsoft and Nintendo have followed the same trend.
But times are changing, and to contend with the fast-evolving technology domain and intensifying competition from PCs, smartphones and the like, all three companies are now launching new hardware more frequently.
In fact, Sony’s step follows a mid-cycle hardware update by rival Microsoft, which brought the Xbox One S to market last month. The Xbox One S is a smaller, more powered-up version of the original, and its pricing starts at $299. Microsoft also announced plans for a bigger update, currently referred to as “Project Scorpio”, slated to go to market late next year.
If we compare the two players, Sony is hands-down beating its chief rival. It has sold 43.4 million PS4 consoles across the world, eclipsing the 22.3 million that Xbox One achieved, per industry website VGChartz.
Sony’s Gaming & VR Strategy
Sony continues to tout its games business to be its biggest growth driver, encouraged by robust console sales, an increase in subscribers to its PlayStation network and the prospects of its virtual reality (VR) headset. In the fiscal year ending Mar 2017, the company anticipates its gaming business to generate about 45% of its overall operating profit, and estimates selling about 20 million PS4s in that period.
SONY CORP ADR Price and Consensus
SONY CORP ADR Price and Consensus | SONY CORP ADR Quote
Sony’s PS4 upgrade might be a strategy to dominate the VR space. Sony will launch its VR headset in October and the games call for a greater processing power compared to those which use standard television displays. The new consoles will enable buyers to connect them directly to the company’s VR headset, which is slated to go commercial this October.
However, Sony has been recently facing pressure owing to weaknesses in number of its businesses, namely, mobile and sensor which are expected to hurt its financials in the near term. Factors like cutthroat competition and weakness in cameras and image sensor business add to the company’s challenges. Also, the Kumamoto earthquakes have significantly aggravated problems for this Zacks Rank #3 (Hold) company by affecting its Devices segment and IPS segments heavily.
Going forward, we expect Sony to continue shifting gears in its growth plans, reflecting changing trends of the fast-evolving industry.
A better-ranked stock in the broader consumer discretionary space is Party City Holdco Inc. , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>