Guts is necessary in life to get ahead and not give up when you're thrown curveball after curveball. Guts in Persona 5 is necessary for confidence, Confidant ranks, conversation options and successfully navigating the black market.
What is Guts?
The Persona games have a variety of social stats that the protagonist can raise to gain benefits in his or her day to day life. Some stats make you better at taking tests, while others such as Kindness help to open up to people. Guts, on the other hand, gives you that added "push" to select special conversation options (in Persona 3-4, this stat was titled "Courage" and gave you the option to, for example, straight out ask for a female party member's number instead of beating around the bush and saying "oh, it's for the investigation.")
In Persona 5, Guts is also necessary to begin a relationship with your arms dealer, Iwai, who will keep you stacked and ready to go against the monsters of the game.
How To Raise Guts in Persona 5
Kindness in Persona 5 is a bit difficult to raise, but you'll be bestowed Guts for seemingly random events. Studying at school library instead of the comfort of your own home, drinking coffee and taking strange concoctions from a doctor that cause you to black out and lose your afternoons all give you a much-needed boost in Guts.
To raise Guts, focus on drinking coffee in coffee shops, reading gutsy books and working at the Crossroads Bar. This bar is tied to both a Confidant and your stats; you'll need Kindness at rank 3, Proficiency at rank 4 and a relationship with the Devil Confidant, Ichiko Ohya, who you can begin talking to on 6/23 at the Crossroads Bar.
Some books and DVDs also grant you a boost in Guts. Check out books from the school library and rent DVDs (or buy books) from Shibuya Central District. You can read these books at home, between classes (if you've cozied up to your teacher enough), on the train or in the library at school. The DVDs, on the other hand, can only be viewed at home on your TV, and they come with a caveat- a late fee if you forget to return them (or don't return them because a mandatory story event pushes you forward a week. Be sure to keep that in mind!
Tae Takimi, your game's back-alley doctor and Death Confidant, is also a great source of Guts. She will sell you medicine to use in your travels in exchange for testing her concoctions. This means you see her when you can and drink whatever she gives you. Basically, risking your guts will raise your Guts.
Munehisa Iwai, the Hanged Confidant, sells you replica guns for your team. To talk to him, you'll need to be at Guts level 4- only one level away from maximum. He's available in the Military Shop at night. Don't worry about finding him-- the game will introduce him to you eventually.
There's one more way of raising Guts, if you're tired out from a long day and don't want to do anything else. Just spend too long in the bath. The Bathhouse is right by your house, near Cafe Leblanc, and is available in the evening. On days when it lets you stay longer, choose the option to relax just a bit more. If you fail and pass out, no worries, you'll still get some Guts for your trouble. If all else fails, there's always hamburgers. The Big Bang Challenge in Shibuya is costly, but even trying the challenge will make you a better man.
Guts in Previous Entries
Persona 5 renamed some of the social stats that had stayed consistent across Persona 3 and Persona 4. "Guts" In previous Persona games the stat was called "Courage," and had the same effect; the higher your Courage, the better your conversation options. Often one Playthrough would have an option greyed out, but for a max leveled protagonist on New Game+, everything would be fair game.
In Persona 3, eating the Wild Duck Burger in the mall will increase your courage. There are also karaoke nights at Paulownia Mall, located in Tatsumi Port Island. Singing there gives you a boost, as does playing Game Panic in the same area-- but only on the days where "Horror Show" is playing! Persona 3 doesn't have a place to buy books, but there is a bookstore for your Hierophant Social Link.
In Persona 3, max Courage is also necessary to start the social link with Fuuka, a late game party member. She is, like most women in the Persona series, dateable.
Persona 3, oddly enough, has only 3 stats to raise, as opposed to Persona 5's 5. The other two stats are Academics and Charm.
In Persona 4, raising Courage is all about eating spoiled, bad or unsavory food out of your fridge. There's even a moment where you can eat your little sister Nanako's science project, which is literally just grass.
While there's plenty of regular food you can eat, if it looks like you shouldn't eat it, eat it. You'll gain a ton of courage, and then fall asleep for the night. Your stomach will hate you, but your Social Links will thrive.
Other than that, working the night shift at the hospital and defeating optional bosses in Tartarus (the game's dungeon) will give you a major boost to courage. Central Shopping Street also sells books to increase the social stat.
Finally, you may get a boost of Courage for eating at Aiya, which is located on the same street.
Guts, or Courage in the earlier Persona games, are just another way to unlock late game options. They don't have any direct affect on your gameplay in the dungeons, but if you ignore them, you're bound to hit a wall sooner or later. The game will say something along the lines of "You need to be at least 'Badass' to start a social link with Fuuka." Without raising that social link, you won't get special bonuses to combat, so don't ignore that feedback loop; eat spoiled food from the fridge, work at that hospital and read tales of brave heroes so you can level up your relationships and hit the end game strong.