It has been over four months since Sony’s shares increased and it did so by a huge 9.89% on Thursday. The increase comes on the heels of two major announcements by Sony on Thursday of this week.
Sony first announced that it would buyback up to 4.8% of total number of shares that have been issued which is worth around $1.82 billion US. The buyback period will be from May 17, 2019 through March 31, 2020.
Nomura, Holdings, Inc., is a Japanese finance holding company based in Nihonbashi, Chuo, Tokyo, Japan, and an analyst there, Yu Okazaki, said that Sony has had an increase in free cash flow that comes from increases in its business. This makes it possible for Sony to invest in growth and provide returns to shareholders, he says.
Sony did have a buyback of shares in February, which was the first time ever that it did so.
The soaring 9.89% increase in Sony’s stock also followed the announcement that it would partner with its major gaming competitor, Microsoft. Sony itself is a major gaming powerhouse and is now scheduled to use Microsoft’s Azure cloud services to stream games and media.
An analysts for the video gaming industry said that the partnership of Sony and Microsoft will have a significant impact in developing the ‘shape and competitive dynamic’ of the video gaming industry due to the use of cloud services.
Piers Harding-Rolls, who is the director and head of games research at IHS Markit, says, “companies with access to cloud infrastructure, with a scaled and efficient service delivery capability are thus well positioned to succeed in this next wave of disruption in the games industry.”
Sony, Microsoft and Nintendo have for a long time dominated the video game console user model. However with Sony and Microsoft, two major video gaming companies that have franchises, joining forces with the use of Azure cloud services, customers and users will benefit from their collaboration in streaming games and content as well as offer gaming creators the use of new development tools.
Harding-Rolls, says it wont have a short-term impact but will in the long run,“If the convergence of the components of the console platforms continues it is possible that there may be an opportunity to virtualize both next-gen Microsoft and Sony servers in the cloud using similar infrastructure.”
Another announcement made by Sony is the possible development with Microsoft of new image sensor chips, but there was no explanation of how the chips would be used.