Sony (SNE, Financial) may have grown a lot over the years, but the company still has many opportunities going forward. Because of its massive size, it will not grow at rapid rates, but that doesn’t mean that the stock can’t be bought.
Virtual reality is a great opportunity
Nowadays, the virtual reality market is gaining traction, and Sony is well positioned to benefit from the trend. Sony can easily leverage the PlayStation to unlock this market, which is exactly what it seems to be doing.
Sony’s PS4 is the latest model of the PlayStation series, but the company is on its way to launching its new PlayStation VR, a virtual reality-based headset for the PS4, this month.
PlayStation VR will be priced at $400 while a bundle comprising the PS camera and Move controllers will be available for $500. According to the Piper’s projections, the company will sell approximately 1.4 million PlayStation VRs this year.
Currently, there are two high-end VR devices, Oculus Rift and HTC Vive, both of which are expensive and can be used only with high-end PCs. Most significantly, the high-end PCs required for Rift or Vive cost at least $600. On the other hand, Sony’s PS4 is priced at $400, and this clearly indicates that PSVR proposes a more reasonable high-end VR experience than other expensive headsets.
PSVR will also work with existing PS4s, and the forthcoming PS4 Neo upgrade could enhance the performance of VR games for an amazing experience. Furthermore, there is no dedicated VR headset designed for Sony PS4’s foremost rival, Microsoft’s (MSFT, Financial) Xbox One yet.
Sony is putting in a lot of effort to grasp a strong position in the VR market as it is poised for significant growth through the next few years. As per TrendForce, the entire VR market will reach $70 billion by 2020. Therefore, Sony’s preliminary efforts in both hardware and content could bring huge gains.
The company also believes that it can leverage its technological strengths in segments like digital imaging, content acquisition as well as production and its entertainment assets. All in all, Sony looks all set to benefit from the virtual reality market and would make for a smart and safe bet.
Conclusion
Sony can leverage its extensive portfolio to benefit from the virtual reality market. Due to the brand value, Sony is a relatively safe bet for investors looking to benefit from the growth of virtual reality.
Disclosure: I don't hold a position in the stock mentioned in the article.
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