Sony Group’s shares are at a nearly 25-year high this week, as its fortunes are driven by an optimism about the growth of its PlayStation division.
The stock reached an intraday high of 3,398 yen on Wednesday, climbing 2% from Tuesday’s close to edge past its March 2000 peak.
Sony’s valuation of more than 20 trillion yen (approx. A$205.77 billion) is the third-highest in Japan behind Toyota Motor and Mitsubishi UFJ Financial Group.
PlayStation is Sony’s highest-earning division, accounting for approximately one-third its earnings.
The rest is divided up between other Sony businesses including film and TV, anime, music, and consumer electronics.
Earlier this year, Sony said that its PS5 was its most profitable console in its 30-year gaming history.
The PS5 has nearly matched the PS4 in the four years since its release, accumulating around A$166.5 billion in sales.
Its newest PS5 Pro console was recently released in Australia at a price point of A$1,199.
There are more game releases lined up for the latter half of the PS5’s lifecycle.
Some of PlayStation’s hit games included God of War Ragnarok, Gran Turismo 7, Returnal, Horizon Forbidden West, Ratchet and Clank: Rift Apart, Spider-Man 2 and Astro Bo.
Sucker Punch’s Ghost of Yotei is confirmed for 2025, and GTA 6 is also slated for release in next year.
Electronics generated more than 40% of group operating profit in fiscal 1999. Since then, Sony has restructured the business by focusing on flat-screen televisions and smartphones and invested in entertainment.
For the current year ending March 31, Sony forecasts group operating profit of 1.31 trillion yen, nearly six times the fiscal 1999 total.
The electronics business no longer is reported as a segment of its own, while entertainment is seen increasing to roughly 60% of overall profit, according to Nikkei Asia.
Profits in the game segment have increased sevenfold since fiscal 1999, while music has grown by a factor of five and films have doubled.
Mizuho Securities expects profits in Sony’s game segment to rise more than 40% in fiscal 2026 from Sony’s fiscal 2024 forecast, with music and film expected to gain more than 20% and 50% respectively.
Sony’s music catalog is believed to have had 6.24 million songs as of March 2024, around 70% more than a decade earlier and more than the 4.5 million held by Universal Music Group at the end of 2023. Its anime business expanded its lineup with the 2021 acquisition of streaming service Crunchyroll.
There is significant investment pouring into Sony’s shares with BlackRock, the world’s biggest asset manager, increasing its holdings. Norway’s government pension fund, which is also one of the world’s largest sovereign wealth funds, raised its Sony holding this year and Saudi Arabia’s powerful sovereign wealth fund is eyeing Sony too.
