Sony shares after the repurchase of shares, partnership with Microsoft

Shares of Japanese conglomerate Sony surged Friday afternoon after the company announced a share buyback of more than a billion dollars and a partnership with a major video game competitor.

In Tokyo, Sony shares rose by more than 10%, reaching levels never seen since December 2018.

This leap followed the announcement made Thursday by the company to repurchase up to 4.8% of the total number of shares issued, amounting to 200 billion yen (about 1.82 billion yen). dollars). The redemption period will run from May 17, 2019 to March 31, 2020.

"The company can now both invest in growth and generate shareholder returns when the level of free cash flow created by companies increases, which gives a favorable impression," Yu Okazaki, an analyst at Nomura.

The latest developments follow Sony's first ever share buyback in February.

The gaming center also announced Thursday a new partnership with its competitor Microsoft, Sony wishing to use Microsoft's Azure cloud services for streaming games and multimedia content.

An analyst called the partnership "significant development for the form and competitive dynamics" of the video game industry.

"Recent announcements and market acquisitions from Microsoft, Amazon, Google, and Tencent underscore that the next competitive game industry dynamic is cloud-centric," said Piers Harding-Rolls, director and chief research officer for games at IHS Markit. "Companies with access to a cloud infrastructure, with scalable and efficient service delivery capability, are well positioned to succeed in the next wave of disruptions in the gaming industry."

The agreement is in its infancy, and many details remain to be determined. But owners of two major consumer interactive entertainment franchises would collaborate to deliver games and content to consumers and offer game developers new development tools. Sony and Microsoft, as well as Nintendo, have long dominated the space of video game consoles.

Harding-Rolls said that the announcement was unlikely to have "a major impact on the industry or the market in the short term".

"More long-term is more interesting: If the convergence of console platform components continues, it is possible that it is possible to virtualize next-generation Microsoft and Sony servers in the cloud using a similar infrastructure." , did he declare.

The last team comes at a time when new notable challengers are trying to overthrow the industry. For example, Google unveiled its own streaming game service, Stadia, in March. The Internet Internet service aims to allow people to play high-end video games without buying consoles or expensive equipment.

The two companies also said that they could potentially develop new image sensor chips together, although no details were mentioned about how the chips would be used.

– Reuters contributed to this report.