Diversification pays: People walk into Sony’s headquarters in Tokyo. The company is expecting to sell four million fewer units of its PS5 console for the current financial year. — AFP
Tokyo: Japan’s Sony upgraded its annual net profit forecast but trimmed its PlayStation 5 (PS5) unit’s sales target, with the flagship console currently in its fourth year on the market.
The conglomerate now predicts a full-year net profit of 920 billion yen (US$6.1bil) instead of its previous target of 880 billion yen.
One reason for the more ambitious outlook is net gains on investments at Sony’s life insurance business, the company said yesterday, announcing a plan to take its financial services division public in October 2025.
PlayStation 5 sales, meanwhile, are at risk of losing momentum, some analysts have warned, especially in the battle with US rival Microsoft.
Sony said it now expects to sell around 21 million PS5 units in the current financial year – trimming an earlier target of 25 million.
“PlayStation 5 hardware will enter into its fifth year, which will be the latter half of the console’s life cycle,” said Naomi Matsuoka, Sony’s senior vice-president.
She told reporters that Sony would “put renewed focus on its profitability”, adding that “we expect its volume sales data to gradually start falling from the next fiscal year”.
When the PS5 was launched in November 2020, supply chain snarl-ups made it difficult to buy.
But those issues have now eased and Sony touted strong software sales and robust user engagement yesterday.
Hideki Yasuda, analyst at Toyo Securities, told AFP before the earnings release that Sony’s 25 million-unit sales target for the PS5 was “a very high hurdle”.
“Sony had to issue an ambitious target so third-party game-makers would develop and release new games. The company could not set a target lower than for the PS4,” he said.
Microsoft has made a strong push to boost its position, including with its US$69bil takeover of Activision Blizzard, the maker of the blockbuster Call of Duty games.
Sony’s video game segment scored a hit with Marvel’s Spider-Man 2, which was released on the PS5 in October last year and became the fastest-selling PlayStation Studios game in the first 24 hours after release.
“Despite the shot in the arm from its Spider-Man 2 title hit, which has come and gone”, Sony needs to watch its back when Microsoft “launches Activision games, namely Call Of Duty franchises on its subscription Game Pass offering”, noted Amir Anvarzadeh from equity advisory firm Asymmetric Advisors.
For the three months to December, Sony saw “significant increases” in sales in its financial, gaming, sensor, music and pictures segments. — AFP
