Technology News: Sony's Stock Gains Upon Revealing Partnership with Microsoft

May 17, 2019 | Friday



Shares of Sony, the Japanese conglomerate increases during Friday afternoon trade. That upon the company's announcement of more than $1 billion share buyback and its partnership with a major game maker competitor - Microsoft.

During morning trade session in Tokyo, Sony's stock soared more than 10 percent levels, not seen since December last year.

The increase followed the announcement on Thursday that the company would repurchase about 4.8 percent of the total number of shares, worth up to 200 billion yen (about $1.82 billion). Sony's buyback period lasts from May 17, 2019, until March 31, 2020.

According to Yu Okazaki, an analyst at Nomura, Sony can now do investment in growth while providing shareholder returns. It will still leave the company free cash flow coming from business increases. That of which provide a favorable impression.

On Thursday, Sony announced its new partnership with a giant competitor - Microsoft. Sony is set to use Microsoft's cloud services (Azure) to stream games and media.

According to an analyst, the partnership of Sony with Microsoft is a "significant development," shaping the video game industry and its competitive dynamic.

Piers Harding-Rolls, director and head of games research at IHS Markit, said the previous reports and the market acquisitions from Microsoft, Google, Tencent, and Amazon showed the next level competitive dynamics within the gaming sector which is mostly centered on the cloud. Harding-Rolls said the companies accessing cloud infrastructure along with scale and efficient delivery capability are in their right places and likely to succeed to its next wave on the gaming industry.

The deal is within the early stages and is yet to determine the specifics. However, the owners of the two entertainment franchises are to collaborate stream games and contents to its consumers and offer game makers with development tools.


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