Key insights
- Goldman Sachs identifies Sony and Capcom as top Japanese videogame stock picks due to strong software pipelines and strategic positioning, while maintaining a Buy on Nintendo. Sony's FY26 pipeline, including GTA VI, and hardware profitability management are key. Capcom's robust release schedule for games and films, including Resident Evil and Street Fighter, is also a positive. This sector-specific analysis, while focused on Japan, has indirect US market influence through major tech/entertainment companies like Sony and potential consumer spending trends.
Investing.com -- Goldman Sachs outlined three Buy-rated Japanese videogame stocks as its preferred picks in the sector before a swarm of major videogame releases in the coming months.
Goldman reiterated its Buy ratings on Sony and Capcom, and flagged a more cautious outlook on Nintendo, although it still maintained its Buy rating on the stock.
Sony Group
Goldman Sachs highlights Sony’s strong software pipeline for fiscal year 2026, which includes both first-party and third-party titles in addition to Grand Theft Auto VI. The firm notes that Sony has clearly stated its policy of balancing growth and profitability improvement amid rising costs, particularly memory costs, as outlined in a June 5 report. With the PlayStation 5 in the latter half of its cycle, Goldman Sachs believes Sony is well-positioned to manage hardware profitability through adjustments to unit volumes and selling prices. The bank views Sony’s positioning as favorable compared with Nintendo in this context.
In recent developments, Sony Group Corporation reported fourth-quarter 2025 results, with revenue of $19.43 billion surpassing forecasts, though earnings per share missed expectations. The company also announced a preliminary agreement with TSMC to form a joint venture focused on developing and manufacturing next-generation image sensors.
Capcom
Goldman Sachs views the announcement that Resident Evil Veronica will be released in 2027 as a positive development, while noting that major DLC for Monster Hunter Wilds was in line with expectations. The company has already released Pragmata on April 17 and announced Onimusha: Way of the Sword for release on September 25. In the visual content space, a Street Fighter movie is scheduled for October, and a new Resident Evil film is scheduled for sequential release from September onward. Goldman Sachs believes Capcom’s fiscal year 2027 pipeline and event calendar is more robust than those of peers. The firm also notes the shares’ attractive valuation, with the fiscal year 2 price-to-earnings ratio now close to the sector median alongside robust profit growth.
Nintendo
Goldman Sachs notes that while upcoming first-party and third-party software characteristics are diverse and suggest room to attract a broad range of users, the only major first-party title scheduled for release in 2026 is The Legend of Zelda: Ocarina of Time remake, which is somewhat underwhelming compared to market expectations. A price increase for the Nintendo Switch 2 console was implemented in Japan on May 25, with increases in the United States and Europe scheduled for September 1. Based on the PlayStation 5 precedent, which achieved penetration at a pace comparable to the PlayStation 4 despite multiple price increases, Goldman Sachs believes the Nintendo Switch 2 will achieve steady penetration from a medium- to long-term perspective as the pipeline expands.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
ProPicks AI evaluates SONY alongside thousands of other companies every month using 100+ financial metrics. Using powerful AI to generate exciting stock ideas, it looks beyond popularity to assess fundamentals, momentum, and valuation. The AI has no bias—it simply identifies which stocks offer the best risk-reward based on current data with notable past winners that include Super Micro Computer (+185%) and AppLovin (+157%). Want to know if SONY is currently featured in any ProPicks AI strategies, or if there are better opportunities in the same space?