Sony (SONY) has confirmed the acquisition of Housemarque, the famous studio behind the Play Station5 (PS5) game Returnal. The acquisition builds on a long-running relationship between the two that dates back to Super Stardust HD’s inclusion on PS3.
The acquisition is expected to allow Housemarque studio to continue developing exciting gaming titles. The company’s co-founder, Ilari Kuittinen, has already echoed his support for the acquisition, reiterating it will allow them to experiment with new methods when it comes to narrative delivery.
The takeover should also allow Housemarque to expand Sony’s PS ecosystem to a growing hub while affirming the studio’s prospects in Finland. (See Sony stock chart on TipRanks)
“We can’t wait to show everyone what will be in store in the upcoming years, and we hope to usher in more lasting memories and exhilarating titles for the next quarter century and beyond,” Kuittinen stated.
Last month, Oppenheimer analyst Martin Yang reiterated a Buy rating on the stock with a $135 price target, implying 35.16% upside potential to current levels. The analyst remains optimistic about management’s ability to maintain the profitable growth of the core business without losing sight of new emerging growth opportunities.
Additionally, the analyst expects the video game business and music to drive strong shareholder returns in the long term.
“We expect growing capacity of CMOS sensor to contribute new growth and offset potential declines in an aging CE and AV equipment business. We believe Sony’s focus on digital entertainment and more shareholder friendly capital return policies will help the company to achieve more stable earnings and cash flows.” Yang wrote in a research note to investors.
Consensus among analysts is a Moderate Buy based on 2 Buys. The average Sony price target of $135 implies 35.16% upside potential to current levels.
SONY scores an 8 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
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