Sony reduced its sales forecast for its flagship PlayStation 5 console on Wednesday, after warning of weaker transactions in its key gaming division.
The Japanese gaming giant said it now anticipates selling 21 million units of the PS5 in the fiscal year ending March, down from a previous forecast of 25 million units.
The reduction in forecast follows Sony’s record quarterly revenue in the crucial December quarter, encompassing the holiday season.
Sony moved 8.2 million units of its flagship PlayStation 5 console during its fiscal third quarter, spanning from October to December.
Thus far in its fiscal year, Sony has sold 16.4 million PS5 units.
Additionally, Sony revised down its fiscal year sales forecast for the gaming division by 210 billion yen to 4.15 trillion yen, citing an expected decline in hardware sales.
Now, the company faces the challenge of sustaining momentum for the PS5, released over three years ago. In October, Sony introduced a refreshed version of the console boasting improved specs.
Nintendo, Sony’s rival, has faced a comparable challenge, yet it has sustained interest in its nearly seven-year-old Switch console through new game releases and media featuring its iconic characters such as Super Mario.
Sony reported a 16% year-on-year increase in sales at its gaming business, reaching 1.4 trillion yen in the December quarter, as announced on Wednesday.
However, the division experienced a 26% decline in operating profit, attributed to heightened losses from hardware due to promotional activities during the period and a decrease in sales of first-party games.
Sony revised its sales forecast for the entire company to 12.3 trillion yen from 12.4 trillion yen for the fiscal year.
When Sony disclosed its results on Wednesday, it surpassed analyst expectations by a significant margin in its fiscal third quarter.
December quarter comparison of Sony’s performance to LSEG consensus estimates:
- Revenue: 3.75 trillion Japanese yen ($24.9 billion) versus 3.58 trillion yen expected
- Operating profit: 463.3 billion yen versus 428.4 billion yen expected
Sony revealed its intention to partially spin off its financial services business through a public listing.
The plan involves distributing slightly over 80% of its shares of Sony Financial Group through dividends in kind as a consequence of the spinoff, with the listing scheduled for October 2025.
During the December quarter, Sony’s financial services unit experienced a remarkable revenue surge of over 1,100%, reaching 311.7 billion yen.
The company attributed this growth to increased sales in its insurance business.
Additionally, Sony reported a 21% increase in sales in its image sensor business, supplying companies like Apple with smartphones.
In January, Sony abandoned a proposed merger with Indian company Zee Entertainment.
The deal, in negotiation for over two years, was viewed as Sony’s entry into the lucrative Indian entertainment market.
Sony’s Chief Financial Officer, Hiroki Totoki, remarked on Wednesday about India’s significant growth potential.
He stated that the company will explore diverse opportunities in the country and will consider alternatives to the unsuccessful Zee merger.
