Throughout 2024, American companies have been rewarded for divesting languishing businesses, refocusing on what works, and spinning off promising (but unproven) new ventures. Now, SonySONY

is showing that this approach isn’t just an American trend. The Japanese giant has moved away from its roots in electronics, embracing its fast-growing gaming and entertainment segments — and investors have never been more bullish.

• Earlier this month, Sony’s shares set their first record close in 24 years after reporting a 69% jump in quarterly profit last quarter — with optimism stirring around the entity’s greater emphasis on entertainment.
• Still,SONY
  has lagged the broader US market, up just 13% YTD — steadily justifying its $129B valuation on the backs of higher sales in its games and software businesses.

Level up: Sony, the maker of the PlayStation and operator of a number of its own game studios, is generating excitement around a 2025 gaming industry revival. Bloomberg reports that gaming now makes up a third of Sony’s revenue — and industry analysts, like Pelham Smithers, predict that 2025 will be “one of the greatest years ever for videogames,” anticipating the entertainment empire will capture a healthy amount of the banner showing. That comes after a weak year for game releases and a paltry spread of new console launches. Sony looks well-positioned to benefit from the anticipated boom.