Music is Sony's highest-margin segment, generating an operating margin of nearly 20% in fiscal 2020. Sony is continuing to ride the growing demand for streaming music services. Investments in first-party studios to develop more exclusive titles for PlayStation owners should keep Sony squarely in the lead against Microsoft.Ĭontinued growth in gaming is a major catalyst for the stock, since the segment is expected to generate a third of Sony's operating profit in fiscal 2021. Despite near-term supply issues, management expects to sell as many PS5 units in fiscal 2021 as the PS4 sold in the first fiscal year after its launch in calendar 2013.
The PS5 has already outsold the Xbox Series X/S by about 60%, according to data from VGChartz. PlayStation has outsold its primary competitor, Microsoft's ( MSFT 0.15%) Xbox, in every console cycle since the first PlayStation launched more than two decades ago. From fiscal 2010 to fiscal 2020, Sony's gaming business grew from just 12% of the company's total revenue to 30%, and the strong demand for PS5 and growth in the video game industry overall should keep the momentum going. The PlayStation brand is the gift that keeps on giving for Sony.
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