The global gaming craze is sweeping the world, and 2025 may be the "greatest gaming year"! Sony's stock price has embarked on a "long bull curve".

The stock price of Sony Group (SONY.US), a leading player in the Japanese technology and entertainment industry, has finally been pushed to a historic high by bullish forces in 2024. This has boosted the confidence of investors and analysts who are bullish on this Japanese giant, as they believe that the gaming craze is sweeping the globe and the prospects for development in the electronic gaming sector are extremely optimistic. They expect the upward trend in Sony's stock price in the Japanese stock market to continue until 2025, with the belief that Sony's stock price will continue to rise in a "long-term bull market". Although the trading price of Sony in the Japanese stock market has reached a historic high, the ADR price in the US stock market has yet to surpass the historic high set during the 2000 Internet bubble. The stock price of this consumer electronics manufacturer for PlayStation soared from the interim low in August to the historic high set last week, with a cumulative increase of over 50%. The market value has reached $130 billion, during which the increase in stock price was more than twice that of Japan's benchmark stock index, the TOPIX index. This is the first new high for the stock in the Japanese stock market since the global Internet bubble in 2000. The continuous growth of the company's gaming business is the core logic favored by investors, with the gaming business currently accounting for more than one-third of Sony Group's total revenue. It is expected that the prosperous development of the gaming industry next year will further boost Sony's stock price. Gamers have high expectations for the upcoming highly anticipated internal game "Soul of Yamaniev" and the potential blockbuster "Grand Theft Auto 6" (GTA 6) from Rockstar Games, which is expected to attract gamers from around the world. Industry insiders predict that "GTA 6" may break almost all records in the electronic gaming industry in terms of both gamer size and sales revenue. Other hot games expected to be released in 2025 include Capcom's "Monster Hunter: Wilderness". Since its introduction in the late 1990s, the GTA series of games has generated billions of dollars in revenue. It is understood that Take-Two Interactive Software (TTWO.US), the developer of the GTA series game, unexpectedly narrowed down the release window of GTA 6 to the fall of 2025 in May, laying the foundation for the release of one of the world's most popular game series next year. Wall Street investment firm Wedbush Securities predicts that the growth in orders for Take-Two over the next two fiscal years will largely come from "GTA 6" to be released next year. With investors' optimism significantly boosted by the gaming craze, bets on Sony's decline have been significantly reduced, with short positions dropping from over 2% about a year ago to just 0.5% of the freely tradable shares. "We expect 2025 to be the greatest year in the history of electronic gaming, and I believe Sony will get a big piece of it," said analyst Pelham Smithers, who specializes in the gaming industry, at his London investment research company specializing in research reports for the Japanese stock market. Smithers added that the compatibility of PlayStation devices with games made by other companies gives Sony a significant advantage over its competitor Nintendo, as Nintendo's game consoles are limited to its own games. The latest financial report shows that Sony's games and network services division accounts for approximately 37% of its total revenue, with revenue reaching 1 trillion yen (about $6.4 billion) in the three months ending in September. Strong performance in the gaming and music businesses offset uncertainties in Sony's semiconductor business, leading to significantly higher profits in the company's last quarter and an upward revision of its outlook. Sony's financial report shows that its games and network services division is the key driver of the company's strong growth, focusing on third-party game software sales, currency rate improvements, and increased sales of PlayStation Plus online services. Sony currently predicts that its games and network services division will generate revenue of 4.49 trillion yen (about $29.3 billion) for the fiscal year ending March 3, 2025. This is more optimistic than the forecast of 4.32 trillion yen (about $28.2 billion) in August. It is also expected that the overall operating profit of this division for this fiscal year will increase by 35 billion yen. In anticipation of the Christmas and New Year holiday season, Sony launched the PlayStation 5 "Pro" version for $700 in mid-November. However, Junichi Inoue, portfolio manager and head of Japanese stocks at Janus Henderson Investors on Wall Street, stated that Sony's recent success in the stock market and performance is mainly attributed to its reduced dependence on game consoles and focus on gaming software and intellectual property. Inoue stated that games, music, and movies are "intrinsically cash-generating" growth businesses that greatly help the company deal with the inevitable cyclicality and volatility of the chip industry. The "Japan Market Opportunities Fund" managed by Inoue holds a large stake in Sony. He added that the high-quality management makes Sony an ideal investment for "buy and hold for the long term". In recent years, "strategic" acquisitions have expanded the company's entertainment and intellectual property businesses. Sony announced on Thursday that it will acquire a 10% stake in the well-known publishing company Kadokawa Group next month, strengthening its control over the developer of the globally popular role-playing game "Elden Ring", which is set to release a blockbuster sequel next year. Despite the recent rise in Sony's stock price, its price-earnings ratio is still lower than that of Nintendo and its main gaming console competitor Microsoft Corporation (MSFT.US). Damian Thorne, director of Japanese stock research for Macquarie Capital, stated that Sony's stock price is also lower than that of large Japanese technology companies such as Hitachi, indicating that in 2025, Sony's stock price will further rise.There is a lot of room for growth."The gaming business is once again becoming Sony's main focus, and gaming profits seem to be sustainable growth," said Tomon of Macquarie Capital Japan's stock research director. Earlier this month, he significantly raised Sony's target stock price by 17% to 3950 yen. The current trading price of the stock is around 3300 yen. "The valuation is very cheap, and they will achieve strong profit growth through their gaming business - this is a very good combination." Wall Street analysts have been continuously raising their target price, but overall it is difficult to keep up with the rapid rise of the stock - the average target price has only increased by about 9% from its low point in September. Wall Street remains optimistic about Sony, with 24 "buy" ratings, 5 "hold" ratings, and only 1 "sell" rating. Sony will face some challenges next year, including the possibility of the Japanese yen significantly strengthening due to the Bank of Japan's interest rate path, and the trade war initiated by Donald Trump's return to the White House may bring risks to the continuous expansion of Sony's gaming business in the Asian market. However, in the eyes of gaming industry analysts, game software and some online gaming services, such as PlayStation Plus, are considered less likely to be affected by Trump's tariff hikes compared to Sony's gaming consoles and other hardware. "At this time, Sony's stock is standing out among global gaming stocks, one of the key supports being that it is not as negatively impacted by analysts' political concerns about GEO Group Inc as semiconductor and other hardware companies," said Tomon, the stock research director at Macquarie Capital Japan. "Gaming is not a real national security issue."