SONY Raises PlayStation 5 Price in Japan by 19%, Stock Up 3.5%

Sony Group Corporation SONY recently announced a 19% price increase for its PlayStation 5 (PS5) console in Japan, highlighting a challenging external environment (including fluctuations in the global economy) as the primary reason. Beginning Sept 2., 2024, the PS5 will cost ¥79,980 for the standard edition and ¥72,980 for the digital edition.

PS5 was initially launched in November 2020. The price hike comes when the PS5 is expected to be succeeded by a revamped version shortly.

The company also hiked prices for its accessories, including the DualSense wireless controller and Pulse Elite wireless headset, with the changes set to take effect from Sept. 2, 2024.

After the announcement, Sony's stock gained 3.5% on Aug. 27 and closed trading at $96.07, underscoring positive market reception to the price hike.

SONY Stock Up 14% Since Earnings

SONY's stock has gained 13.6% since it announced better-than-expected first-quarter fiscal 2024 results on Aug. 7.

Its revenues rose 2% year over year to ¥3,011.6 billion while net income per share (on a GAAP basis) of ¥189.43 ($1.22) per share increased from ¥175.67 reported in the year-ago quarter. Improved performance of the Game & Network Services (G&NS) segment, which is the largest contributor to its sales, was the primary growth driver.

G&NS sales jumped 12% year over year to ¥864.9 billion, owing to higher sales from network services, notably PlayStation Plus, and rising sales of non-first-party titles along with favorable forex impacts.

In June 2024, active user accounts of PlayStation were a record 116 million. The company plans to boost the G&NS segment by expanding the stable installed base of PlayStation consoles, enhancing gaming experiences and growing its business by expanding into PCs and improving the first-party software titles. Sony has updated its outlook for the G&NS segment. It now expects sales to be ¥4,320 billion, up from the prior view of ¥4,200 billion, owing to the positive impacts of forex rates.

Shares of SONY have gained 17.1% compared with the sub-industry's growth of 13% in the past year.

Image Source: Zacks Investment Research

SONY's Zacks Rank

At present, SONY carries a Zacks Rank #3 (Hold).

Stocks to Consider

Some better-ranked stocks from the broader technology space are Arista Networks, Inc. ANET, Harmonic Inc. HLIT and Ubiquiti Inc. UI. ANET and HLIT presently sport a Zacks Rank #1 (Strong Buy) each, whereas UI carries a Zacks Rank #2 (Buy).

Arista Networks supplies products to a prestigious set of customers, including Fortune 500 global companies in markets like cloud titans, enterprises, financials and specialty cloud service providers. It delivered a trailing four-quarter average earnings surprise of 15.02%. In the last reported quarter, Arista delivered an earnings surprise of 8.25%.

Harmonic enables media companies and service providers to deliver ultra-high-quality broadcast and OTT video services to consumers globally. HLIT delivered a trailing four-quarter average earnings surprise of 32.5%.

Ubiquiti company offers a comprehensive portfolio of networking products and solutions for service providers and enterprises. The company's effective management of its strong global network of more than 100 distributors and master resellers improved its visibility for future demand and inventory management techniques.

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