Analyst Note| Kazunori Ito |
We lift Sony Group’s fair value estimate to JPY 14,000 from JPY 12,000 as we raise our revenue forecasts for the game and network services segment and the electronics products and solutions segment. On the gaming business, we now expect user migration from PlayStation 4 to PlayStation 5 to proceed much faster than we had previously expected, as we believe Sony will succeed in retaining users within its ecosystem through console compatibility and the monthly subscription program, PS Plus. In the consumer electronics business, TV’s product mix and full-frame camera’s market share are likely to exceed our previous forecast. On the other hand, we cut our revenue forecast for the imaging and sensing solutions segment as we now expect the image sensor product mix will be worse than our previous expectation--as Sony prioritizes gaining share on Chinese smartphone brands to fill the gap left by Huawei. Sony expects to supply high-end sensors to flagship models in 2022, but the improvement in product mix would be slower than we had anticipated.