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What Sony Analysts Like About The PlayStation 5 Presentation

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What Sony Analysts Like About The PlayStation 5 Presentation

Sony Interactive Entertainment (NYSE: SNE) unveiled its next-gen PlayStation 5 console Thursday along with an impressive line of games.

Both exclusive and third-party titles were highlighted during "The Future of Gaming" event. The responses to the PS5 have been positive, a good sign considering that a price point for both consoles have not been revealed.

Primary, Digital PlayStation Console Could Boost Sales: The presentation primarily focused on the lineup of games for the PS5, but Sony also revealed two versions of the next-gen console: the PS5 and the PS5 Digital Edition. 

"We were somewhat surprised that Sony announced a digital version of the PS5 without an optical drive, in addition to the traditional model with an optical drive," BofA Securities analyst Mikio Hirakawa wrote in a note. 

BofA believes the market consensus estimate for the PS5 hardware price is $499. The addition of the digital console is expected to help boost sales by launching with a price cheaper than the primary PS5.

See Also: Sony Finally Reveals What The Playstation 5 Looks Like

Morgan Stanley sees the console as likely to be priced high, targeting "hardcore users," analyst Masahiro Ono said in a note. 

Factors such as the design of the hardware as well as the "near life-like images offered" in-game will boost prices, the analyst said.

The added value could give room for Sony to take a risk with premium prices, especially with the addition of the digital version of the PS5. 

Key Titles Help Push Excitement: The first presentation of the PS5 showcased 26 new titles in a mixture of first-party exclusives and third-party additions. Among those, titles like "Spider-Man: Miles Morales" will seemingly coincide with the PlayStation 5's launch. This will help motivate day-one purchases. BofA Securities analysts believe the PS5's software lineup meets expectations.

Morgan Stanley analysts "do not expect the market's view on initial sales expectation to change sharply." Special attention was given to titles like "Spider-Man: Miles Morales" and "Horizon Forbidden West," the only two sequels to "popular PS4 titles that ranked within the top 20 in cumulative copies sold."

Sony Analyst Ratings

BofA Securities maintains a Buy rating with an $80.24 price objective. 

Morgan Stanley maintains an Equal-weight rating.

Latest Ratings for SNE

DateFirmActionFromTo
Mar 2020OppenheimerInitiates Coverage OnOutperform
Oct 2019Gabelli & Co.Initiates Coverage OnBuy
Mar 2019JefferiesDowngradesBuyHold

View More Analyst Ratings for SNE
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