Sony Is Jefferies' Favorite Buy Idea Heading Into E3

The brokerage said, "VR and a lot of focus on Games, and exclusive bits on games, including what we believe could be a console-seller — EA's Star Wars VR game exclusively on Sony PS4. Widely speculated is a PS4.5. We don't mind if Sony chooses a later date to show and sell PS4.5."

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However, what could drive the stock up is virtual reality (VR), as the exclusives in the space are key catalysts. The analyst believes that while Sony could show some VR games on the stage, the real deal will be demos on the floor. Goyal said that if VE demos are convincing, then Sony stock could start a steady rise toward the October VR launch.

The analyst cited competition as the main driver for dragging the stock price down as Microsoft Corporation is also engaged in VR. Therefore, there is a question as to what the rival could take away Sony's momentum.

According to the analyst, "Well, the video game cycle is a loop from which it's difficult to escape. If a platform is doing well, it attracts more developers, who develop more games creating a richer game library. And that in turn drives more demand for the platform and the loop goes on. But it's just the opposite for a weaker platform. Sony started with an early lead in year one and has been expanding that lead ever since."

At time of writing, Sony was down 2.78 percent on the day at $27.97.