I'll be honest I didn't spend a ton of time thinking through the pros and cons of Sony vs Nintendo. But here's my brief thoughts (and why I went with Nintendo):
- Sony trades a discount ~18x versus Nintendo at ~30x. But Nintendo is a significantly more profitable and higher quality company. And they should also see a huge uptick in revenues and profits from the Switch 2 so the valuation gap isn't that big.
- Sony released the PS5 in 2020 and the PS5 Pro last year so while I wouldn't say they're in the "terminal decline" phase yet, I don't see a big uptick either until the PS6 comes out. And there's been zero news of when that will be.
- It's not all bad for Sony though, the release of GTA6 will be a massive boost for Sony.
Thanks for this analysis. Why not Sony and Nintendo?
Hi Dan,
I'll be honest I didn't spend a ton of time thinking through the pros and cons of Sony vs Nintendo. But here's my brief thoughts (and why I went with Nintendo):
- Sony trades a discount ~18x versus Nintendo at ~30x. But Nintendo is a significantly more profitable and higher quality company. And they should also see a huge uptick in revenues and profits from the Switch 2 so the valuation gap isn't that big.
- Sony released the PS5 in 2020 and the PS5 Pro last year so while I wouldn't say they're in the "terminal decline" phase yet, I don't see a big uptick either until the PS6 comes out. And there's been zero news of when that will be.
- It's not all bad for Sony though, the release of GTA6 will be a massive boost for Sony.