Sony's (NYSE:SONY) State of Play Puzzles: So What's Next?

Business Insider

16 hours ago

While much has been made of Microsoft's (MSFT) recent game show event, and of the potential fate of its entire console market, much less has been seen of Sony (SONY) and its own efforts on this front. Sony actually had an event it called the State of Play, an event that seeks to replace the Electronics Entertainment Expo, or E3.
But what Sony's State of Play had to reveal was almost as disconcerting as Microsoft's Xbox Games Showcase. So now, we take a look at the other side of the coin in console games…and why it was downright distressing.
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What it Had
There were some who compared the State of Play to an Apple (AAPL) event, and not without reason. Because what Sony had to show off was impressive, even if there was not much of it.
Naturally, Sony stuck to its leaders. A new installment of Bloodstained emerged, along with Final Fantasy Tactics. There was also something of a surprise as the Everybody's Golf / Hot Shots golf franchise made a return, coming out this September. And, of course, Sony brought out what Marvel it still had a connection with in the form of Marvel Tokon: Fighting Souls.
But that was about it, aside from a few others. A few surprises, a few big names, a few others. The operative word for State of Play seemed to be 'few.' The revelation that Helldivers 2 would be coming to Xbox as well could not have helped the situation much.
What was Missing
And if 'few' summed up what was there, 'many' might have done a better job for what was not there.
For instance, one major missing feature was Resident Evil. While Pragmata made an appearance, that seemed to be the limit of Capcom's (CCOEF) capacity. And with the last Resident Evil release, the remake of Resident Evil 4, being released in 2023, the odds of seeing a new Resident Evil before 2026 are vanishingly long.
Also missing was the Wolverine game from Insomniac which first appeared in 2021, Phantom Blade Zero, and several other PlayStation exclusives that should have been there, but never were. Just ask any Elder Scrolls fan what early announcements with no followup do- to brand confidence.
Perhaps worst of all, there was very little to be said about Sony's next console system. With reports suggesting that a Microsoft console could be more like a PC than it has ever been, if it even shows up, it could be that the entire console market is at risk.
Bloodborne and Marathon were also oddly absent, though the loss of Marathon might have been for the best. Sony's luck with live-service games these days has been, well, lacking to say the least. The huge embarrassing failure that was Concord is likely still stinging Sony, and may be putting a damper on Marathon. There were 12 live-service games planned, originally, but all but two were canceled or delayed with one still theorized to be in development.
What to Make of It
Sony's ability to make hay while the sun shines here is dubious at best. With Microsoft having a soft year until its big Xbox anniversary, Sony might have been able to capitalize. But with what it had to show, it looks like that ability will be muted.
So now, either Sony will simply have little to go on for the next two years, or will bring out a decent slate just in time to compete with whatever Microsoft has on hand. Either way, this is a less than optimal situation for Sony, and at a time when Sony could have used a win.
Is Sony a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SONY stock based on two Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 47.32% rally in its share price over the past year, the average SONY price target of $29 per share implies 13.37% upside potential.