Sony shares plunge 8.6% after lowering PlayStation 5 shipment forecast

Sony PlayStation 5

Sony ended the quarter with a 13% increase in revenue, but the fiscal year forecast for the number of PlayStation 5 consoles shipped was cut from 14.8 million to 11.5 million units, and revenue expectations for the gaming division were cut by 6%. Sony’s stock price after the opening of trading on Thursday reacted to these forecasts with a decline of 8.6%.

Sony shares plunge 8.6% after lowering PlayStation 5 shipment forecast

Sony representatives, as Bloomberg explains, exacerbated investor pessimism with statements about the high probability of continued shortages of components throughout the 2022 calendar year, as well as problems with logistics. The success of Sony’s film business and strong revenue from Apple’s smartphone image sensors somewhat offset the negative impression from the quarterly report, but the long-term prospects for Sony’s gaming business caused investors great concern.

Even the absence of structural changes in the market, according to experts from Asymmetric Advisors, would not allow Sony to improve its financial performance in the next quarter, especially given the possibility of abandoning lockdowns around the world. If Sony launches its subscription streaming service by next quarter, it could negatively impact the profitability of its business.

Sony PS5

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Sony PS5 sale is quite stable – just over 17 million units

Sony released its financial report for the third quarter of fiscal 2021. Thanks to the strong performance of film and television, music, semiconductor, and financial businesses, its sales revenue reached 3,031.3 billion yen ($26.4 billion), a year-on-year increase of 13%. The company’s operating profit for the quarter was 465.2 billion yen ($4 billion). Excluding one-off factors such as equity interests, asset write-downs, and COVID-19 fund expenditures (this fiscal year and the previous fiscal year), operating profit for the quarter increased by 15% year-on-year. However, the Sony PS5 sale is quite good in terms of operating profit.

The entire Sony Game and network service have sales of 813.3 billion yen ($7.1 billion), down 8% year on year. The decline was mainly due to the decline in hardware and peripheral sales; the decline in sales of non-first-party games (including in-app purchases), and the sales of first-party games.  However, the operating profit of the game and network services segment increased by 121 billion yen ($1 billion). This is mainly due to the losses from the Sony PS5 selling below cost price; and the reduction of sales management expenses.

In addition, Sony lowered its fiscal 2021 sales forecast for its Games and Network Services segment; due to lower-than-expected Sony PS5 sales. As of December 31, 2021, PS5 has sold a total of 17.2 million units. In the third quarter of the fiscal year, Sony PS4 sold 200,000 units; Sony PS5 sold 3.9 million units, and games sold 92.7 million copies (11.3 million first-party games). The digital version of the game accounts for 62%. Sony PS+ membership has 48 million subscribers and 111 million monthly active users.


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