The tech sector is still one of the best sectors to invest in, as tech giants try to use the latest technology to produce newer and better products. Apple Inc. (NASDAQ:AAPL), Samsung and Google Inc (NASDAQ:GOOG) are among some of the hottest tech companies at the moment, looking to give investors a decent return. The gaming segment, along with the smartphone segment, is one of the most important parts of the tech industry, and it looks set to shine by the end of 2013.
The current year is all about the two most talked about consoles: Microsoft Corporation (NASDAQ:MSFT)’s Xbox One and Sony Corporation (ADR) (NYSE:SNE)’s PlayStation 4. Nintendo’s Wii U is another hot console at the moment, even though the console hasn’t performed that well. Nintendo’s previous Wii Console did quite well in terms of global sales; however, the company has sold just 3.45 million units of the Wii U, globally. After the big E3 event, there have been mixed opinions on whether the PS4 or the Xbox One will shine by the end of the year.
Valuation
Sony Corporation (ADR) (NYSE:SNE) is going through a restructuring. Kazuo Hirai, Sony’s CEO, is determined to take the company in the right direction. After the company’s downfall and its losses, Sony Corporation (ADR) (NYSE:SNE) has been looking good under Hirai, not only in the gaming division but also in the smartphones division. With a market cap of over $20 billion, Sony Corporation (ADR) (NYSE:SNE) is currently trading between $19.50 and $20.50. After the company hit below the $10 mark, Sony Corporation (ADR) (NYSE:SNE) has been going up, mainly because of its confidence going forward. The company’s fiscal year earnings ending March showed a profit of around $458 million, which is the company’s first yearly profit in five years. While Sony’s smartphone sales jumped by 27%, the gaming division declined as expected, mainly because of the life cycle of the PS3.
Sony’s Xperia Z smartphone hit stores a couple of months back and it has been well received by consumers. Since then, the company has released several smartphones in the Xperia range and the mobile division looks like it’s heading in the right direction.
Microsoft Corporation (NASDAQ:MSFT), on the other hand, is a victim of the declining PC market. Microsoft Corporation (NASDAQ:MSFT) was formed as a software company, with its Windows OS being the most popular OS in the world. However, after the constant downfall of the PC market, the company gambled its future on its latest OS, Windows 8. Even though the performance and reception of Windows 8 let many people down, there is still a lot of potential to what the OS can do, from laptops and tablets to hybrid PCs.
With a market cap of over $291 billion, Microsoft Corporation (NASDAQ:MSFT) is currently trading between $34 and $35. The company’s recent earnings report showed a quarterly profit of around $5.11 billion. Even though the PC market fell by 13% in 2013, the Windows division showed a 23% increase in revenue.
Microsoft Corporation (NASDAQ:MSFT) is primarily a software company, but it has various divisions, including the gaming division. Microsoft Corporation (NASDAQ:MSFT), after entering into the gaming market, did quite well with its Xbox and Xbox 360 consoles against market giant Sony.
Nintendo is one of the biggest names when it comes to gaming, especially because of its earlier success with consoles like the Nintendo 64. The company, with a market cap of over $12.7 billion, is currently trading between $12 to $12.5. After hitting the $17.5 mark last year, Nintendo has been on a decline and will continue to drop unless the Wii U sales pick up the pace.
The 2013 gaming war
Sony Corporation (ADR) (NYSE:SNE) has a reputation in making brilliant gaming consoles and it is still probably the biggest brand name when it comes to gaming. Microsoft has done well in recent years and has even outsold Sony’s PS3 console for several months; however, Sony’s console has outsold the Xbox 360, in terms of total sales, since the release.
Sony and Microsoft held events for their much-awaited gaming consoles and the events were generally well received. However, Sony has definitely made a bigger impact at its E3 event this month. In terms of pricing, Sony has a massive advantage as the PS4 will go on sale for $399, while the Xbox One will have a price of $499. Nintendo released their Wii U console last year at $299 for the basic version and despite poor sales, the company is still charging the same price.
