Key Takeaways
1. Analyst Michael Pachter believes investors should avoid purchasing Sony stock, criticizing the company for its performance in the gaming sector.
2. Pachter predicts a significant shift towards cloud gaming on connected TVs, moving away from traditional gaming hardware.
3. He suggests that investors focus on the mobile gaming sector, highlighting Playtika Holding Corp. as a potential investment opportunity.
4. Pachter has a history of promoting cloud gaming and has previously praised Microsoft’s Xbox Game Pass for its potential in the industry.
5. Xbox is adjusting its strategy to increase profitability, resulting in higher Game Pass subscription prices and cuts to its Game Studios division.
In a recent panel talk on Yahoo Finance, which was sparked by EA’s acquisition for $55 billion by a group including Saudi Arabia’s PIF, Silver Lake, and Affinity Partners, analyst Michael Pachter from Wedbush Securities shared his take on Sony’s future in gaming.
When asked if investors should consider purchasing Sony stock during this time of industry consolidation, Pachter wasted no time in responding, “No, definitely not Sony, they are a horrible company, and they are messing up in the gaming sector.”
Pachter’s Viral Remarks
Pachter’s remarks quickly gained traction on ResetEra, especially since he has a history of being negative towards traditional console manufacturers like Sony, which he has previously described as a “bad company” compared to Nintendo. He has also claimed in earlier evaluations that the PlayStation division is “doomed.”
The Shift to Cloud Gaming
According to Michael Pachter, the future of gaming is shifting towards cloud gaming on televisions rather than relying on dedicated hardware. He stated, “Games are transitioning to connected TVs. Imagine all the players delivering games just like we get movies through Netflix, and don’t just think about subscription models. Picture iOS being accessible on your TV. So who will bring free-to-play games to your TV? Cloud providers, AI, anyone investing in making that possible is where the smart money should be.”
Pachter further suggested that investors should avoid traditional console giants and focus on the mobile gaming sector, specifically mentioning Playtika Holding Corp., a social casino developer where he owns 500,000 shares. He noted that Playtika is trading at “about a four and a half multiple” of earnings and could potentially earn him “several million dollars” if it achieves an EA-level valuation.
Pachter’s Previous Predictions
This isn’t the first occasion where Pachter has promoted cloud gaming and alternative models; he has often praised Microsoft’s Xbox Game Pass as a guiding light for the industry. He once anticipated that the inclusion of Activision Blizzard games after Microsoft’s acquisition would cause the service to surge to 100 million subscribers instantly, later revising his estimate to predict 200 million Game Pass users by 2034. However, he adjusted his expectations in July 2025, citing the strong competition from PlayStation exclusives as a factor hindering growth.
Meanwhile, Xbox is making strides to enhance Game Pass subscriptions by introducing Xbox Cloud Gaming to selected vehicles through a collaboration with Microsoft and LG, backed by LG’s webOS ACP.
Recent Changes at Xbox
On the other hand, Xbox’s focus on increasing profitability has led to recent hikes in Game Pass subscription prices and a reduction in its Game Studios division, which could provoke some level of backlash from both developers and consumers in the near future.
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