On Wednesday, Japan’s Sony Corporation revised its full-year sales prediction for the PlayStation 5, reducing the estimate from 25 million units to 21 million. This adjustment follows disappointing sales figures during the critical year-end shopping season.
The technology giant expects unit sales to gradually decrease in the upcoming financial year and noted that no major franchise game releases are planned for that period.
In addition to the sales forecast, Sony announced its intention to publicly list its financial unit next year. The company aims to launch the Sony Financial Group on the stock market in October 2025 while retaining just under a 20 percent stake.
For the October-December quarter, Sony reported an operating profit of JPY 463.3 billion ($3.08 billion, approximately Rs. 25,568 crore), marking a 10 percent increase and surpassing the average analyst forecast of JPY 428 billion (around Rs. 23,663 crore). The robust performance in the financial, movies, and music sectors helped mitigate the decline in the gaming division.
Historically recognized for creating the Walkman, Sony has evolved into a multifaceted company with extensive interests in entertainment, technology, and multimedia.
During the third quarter, which is pivotal for holiday shopping, Sony sold 8.2 million units of the PlayStation 5, a slight increase from 7.1 million units sold in the same period last year.
However, the gaming division experienced a drop in operating profit by around 25 percent, largely due to increased losses from hardware associated with promotional strategies and lower first-party game sales.
Industry analyst Serkan Toto, founder of Kantan Games, remarked that Sony’s ambitious sales target was likely unrealistic, suggesting ultimate sales will more likely fall between 22 and 23 million units.
On the PlayStation Network, monthly active users soared to 123 million by the end of the quarter, up from 107 million three months earlier.
Sony has reported selling 10 million copies of Marvel’s Spider-Man 2, which debuted on October 20. To further stimulate sales, the company is set to introduce a slim version of the console starting in November.
In a contrasting announcement, Nintendo recently raised its full-year Switch sales forecast from 15 million to 15.5 million units, indicating an extended lifecycle for its aging console.
Meanwhile, Microsoft, the maker of Xbox, is anticipated to provide updates on its gaming division on Thursday, amid ongoing speculation about expanding its titles to additional platforms.
Sony President Hiroki Totoki expressed hope that growth in major third-party titles will create beneficial momentum for the company’s gaming division.
The company, a leader in smartphone image sensor manufacturing, also reported an 18 percent increase in profits for its chip division, driven by heightened sales.
Recently, TSMC announced plans to establish a second chip manufacturing facility in Japan, with partnerships including Sony, signaling confidence in Japan’s semiconductor industry.
In a strategic shift, Sony abandoned plans for a $10 billion (about Rs. 83,000 crore) merger of its Indian operations with Zee Entertainment, which would have formed a major television conglomerate. Despite this setback, Totoki noted the long-term growth potential of the Indian market.
He added that Sony is open to seeking new opportunities in the region to replace the abandoned merger and is reevaluating its organic growth strategy.
Sony’s shares saw a dip of 0.5 percent ahead of the earnings announcement, though they have overall gained 9 percent this year.
© Thomson Reuters 2024
